cut a deal on other bills before they actually tet -- pass the tax package? will nancy pelosi hold it at her desk as a bargaining chip for the rest of the session? there are various scenarios that could happen. keep in mind that the other big bill that must pass this week -- the tax cut bill sort of has to pass by the end of the year or else tax cuts expire. the other bill that has to pass this week is the continuing resolution to keep the government running. it will either be a continuing resolution which keeps programs running at last year's levels or you have an on the bus which is bound to larger. -- which is much larger and includes earmarks and there will be hundreds of more pages of legislation and that is being put together by the senate appropriations -- the senate

appropriations chairman. if they cut a deal on that, you could see potentially that being the place where house democrats get some of the things they want on this tax cut bill. it is an interesting interplay potentially between these two must passed bills. host: where does this leave the start treaty? guest: the start treaty is the caboose at the end of the line. it is the thing that members in both parties want to get done very republicans say that we are running out of time. democrats acknowledge that they are running out of time but they say that they can stay until they get it done. if the tax cuts and on the bus are not resolved at the end of this week, harry reid could say congratulations, we are staying until christmas because you guys

are demanding more time for the start treaty. there are several other democratic priorities that have been delayed week in and week out prius of them have been over the tax-cut issue. carl levin mentions the "don't ask, don't"tell issue which may be brought up as a stand-alone votes. that will have the same problem as the tax cut issue. it probably has 60 votes if the tax-cut issue has been resolved because there have been additional republican senators who have indicated they will support it if it was resolved. you have that dream act which is almost certainly not going to pass the senate. that is a big campaign promise for harry reid. host: joe lieberman is trying to figure out a way to get that back to the senate floor this week. guest: that will come back to the floor as a campaign promise that harry reid made.

will he get the 60 votes to bring it to the floor? nobody i know expects them to get anywhere close to 60 votes. that would give about 2 million immigrant students and soldiers a pathway to citizenshi, potentially. that is a big democratic priority which passed last week in the house. it is not likely to pass this year but it is something the democrats believe is an important political item for them going into the next elections, potentially with hispanic voters. startou've got this treaty hanging out there and that is interesting. you need 67 votes for that. you have people like john mccain who potentially want to vote for this thing. you also have international

relations. 20 years ago, this probably would not be that contentious an issue. the previous start treaty is passed fairly easily the cold war is over. this treaty does not dramatically change our levels of nuclear weapons. it is a relatively modest cuts. it is interesting how it has become this bargaining chip at the end of the session. host: >> next, a forum on u.s.-china relations. after that, a look at iran and its nuclear program. then a discussion on ways to stimulate the u.s. jobs market.

monday, a look dead recent efforts to regulate financial markets. the discussion covers the dog frank act, proposals from international groups and other services within the financial industry. that is live on c-span 2. >> the supreme court book is being offered directly from our publisher to c-span viewers for just $5 plus shipping and handling. that is a discount of more than 75%. this is the first book to tell the story of the supreme court through the eyes of the justice system. this includes prior and

sotomayor. this has a view of the court, rich with tradition and photographs detailing the history of the landmark building, a handsome addition to the bookshelf of anyone. to get this go to c-span.org, and be sure to use bonanza p -- the promo code c-span at checkout. >> the president of china is scheduled to visit washington, d.c., next month. steinberg and john kerry discuss the u.s. relationship with china at a forum hosted by the center for american progress. deputy secretary steinberg talked about u.s. economic security as well as the role in the korean peninsula. senator kerry discussed in china

costs growing energy needs and their role in the korean peninsula. mrs. about 40 minutes. -- this is about 40 minutes. >> we are combining forces. yesterday we joined forces to discuss a path forward. this year we are pleased to host a high level of delegations of chinese representatives and continue our discussion of the issues at hand. we hope our dialogue will facilitate further understanding and more trust between our countries and advance political

and economic relationships. we are hosting this conversation with secretary james steinberg, and later, john kerry will be back here to give a capital phil take on the u.s.-china relationship. we will spend today and tomorrow digging deeper into our shared concerns and frictions with our counterparts, so we are very fortunate to be here this morning and into the afternoon to have two distinguished diplomat soon kick off our discussion. first, i am going to introduce sandy berger, now the chair of the group and the national

security advisor to the clinton. he guided u.s. policy from the balkans to close the vote -- to kosovo to trade relations with china, and then the secretary of state madeleine albright is also in the front row. of a having a little bit west wing clinton reunion if you will forgive us here, but together they kept a watchful eye to maintain stability of the korean peninsula, which is so much in the news today, and i am sure jim will discuss that. i am going to turn the podium over to sandeep in just a second

to introduce steinberg. our senior fellow will moderate the discussions. i will turn over the microphone to a great friend and a great public servant. [applause] >> thank you, john. it is a great pleasure to introduce the fet secretary of state steinberg in this dialogue. the president said the u.s.- china relationship with the fine -- will define the 21st century. i have the pleasure of working

with jim in the clinton white house as deputy national security adviser. some of you know the office is the size of a shoe box. i would venture to say when he was there, there was more brainpower per square foot than ever before. jim was known for the energy he brings, sweeping knowledge and intellectual rigor. there is not a single subject he does not bring clarity to. he has traveled the world, upbringing peace and stability.

he has been engaged in the u.s.- china relationship, and interested goes back. in march at a very critical time in our relationship, the president sent him to beijing to get the relationship back on the right track, and i understand they decided some should come back in the next week to try to deal with north korea as a testament to the hierarchy is held in. it is a great pleasure to introduce jim steinberg. [applause]

>> it is especially meaningful coming from you. it is quite special to be here with so many friends and colleagues who ever worked so closely together, and i think if we reflect back on the long road we have traveled, it is important to keep that perspective. it is now a little over a year since i last had a chance to talk about china. i want to thank everyone involved in this effort. it is especially timely to look at strategic thrust, and you have the kinds of people here who understand the deep opportunities as well as the

challenges in this relationship. i am going to give a fairly broad overview of what i see as the achievement and some of the challenges we face going forward as we continue to build a relationship which has transcended administration's proposed for a long time. it is supposed to be the flavor of the week that somehow the u.s. and china relationship is experiencing a downturn, but we do not see it that way, and i want to explain how we look of the overall relationship and see there are concrete relationships as well as some of the areas where we can do more together to achieve common interests. i think it is important to recall the broad framework with

which we have pursued this. we welcome the rise of a prosperous china and to protect and promote our national interest, the we see it in our interest to solve the global challenges. we fully appreciate the complexity of managing the power. we see our responsibility to work together to achieve solutions, and with each step we take in support of our common interests, and we build a foundation we can achieve even more in the future. we have a broad agenda ranging

from international security, and these form the elements of our discussions. we develop greater understanding cents, and that is the foundation of building trust in the u.s.-china relations for the long term. even today we are working to lay the ground works for the strategic dialogue next year, and this allows us to have a broad range of discussion with not only the state department treasury but across the entirety of our government and chinese

counterparts on economic and financial issues, security issues, and the like. we see the need to promote peace in east asia. there is the key strategy starting with our core of alliances. also building strong relationships with the emerging powers. in this context, our relationship with china is

really critical, and that is why in working with china we see great opportunities to strengthen peace in the region in the long term. good we have had a chance to engage through the east asia summit and appreciate the efforts to join in the summit. this is also part of a broader effort made including our participation in the first summit since -- summit. in addition is the regional cooperation. this regional cooperation is critical, and we are encouraged to see that recently china has taken steps to begin to discuss

conduct in the south china sea were obligation, respect for international law, and conditions are essential for all of us in the united states and china and in the world and to achieve secure commerce in the region. we have been working together to strengthen and work towards a world in which proliferation is addressed globally the proposed

strong sanctions on iran for its non compliance with international obligation, and we will continue to work toward making this process work as we make clear that if they are not prepared to move forward, there will be consequences. the second area is in the context of north korea. the recent tensions on the korean peninsula have been caused by provocations followed by the revelations of three uranium enrichment program and highlights the need for strengthened cooperation on this

strategic issue. we want to work with china to address this challenge. on the presidential statement issued last year, and later that spring in response to the north korean nuclear test. we have demonstrated we can work together, and senate continues to play a stronger role, making clear there are consequences for the actions and that there will be an opportunity for an increase in the engagement. i think it is important to recognize the steps taken and the consequences they have in the region, so in the context, china has a critical role to play. we look forward to demonstrating

our partnership is effective in addressing this challenge. part of dealing with this security challenge requires us to balance a strong dialogue with china, and we welcomed the resumption of military dialogue between the united states and china. a sustained relationship is critical to solving the kinds of challenges i have been discussing, so we are looking forward to the talks over the next few days as well as the trip to china next year. these discussions about issues like defense policy are important for making sure we enhance transparency and try to avoid the danger our military's will become rivals. we need to make sure this is

sustainable and not prejudiced by disagreements when the need for dialogue is more important. the china policy remains an important part based on the taiwan relations act, end we are aimed at promoting dialogue. we continue to believe appropriate defensive arms sales gives confidence to approach the mainland, and we are encouraged by the steps that have been taken, and we want to urge them to continue to build trust and contribute to stability. the are also working hard for other aspects of cooperation such as counter-terrorism,

counter piracy, and law enforcement. it gives us the opportunity, and we need to work together on some other challenges outside east asia. i want to pay attention to the need to see implementation for the agreement and and the importance of moving forward to secure a stable future for the people of sudan. we are working in afghanistan and other places. we seek a comprehensive agenda, and as we work together, we contribute broadly to regional and global security. the economy is also a critical

part of our relationship. we work together to address the challenges of our time. the global economic power has been swift, and it has changed trade substantially. both the united states and china's long term stability depends on our ability to manage economies, and we are working together. the u.s.-china joint commission on trade meets regularly to discuss trade issues. in may we held our first ever. meaningful projects can contribute three significantly to a successful visit next year.

china because domestic economy remains a strong agenda for global economy. we hope through increased domestic consumption, it can become a catalyst for growth. we have higher expectations for continued improvement as well as for ipr enforcement. we believe stronger trade will strengthen our economy. chinese officials have reaffirmed, enhancing the exchange rate flexibility, and we are working in support of our global efforts. the united states enforces a griddle -- greater role to promote economic growth. a third area of partnership is

environment and energy. we are working to encourage china to rely on markets, and we continued to encourage discussion and participation for energy supply emergencies. we share responsibilities to produce strategies that improve the efficiency and events common interests on climate issues. we are working together on civilian nuclear power and the development of other unconventional gas resources.

under this framework, the partnership program has developed partnerships on issues such as research conservation on all local level. they're sharing green practices while others are collaborating on research. we are looking forward to constructive engagement with china in the conference on climate change currently convening in cancun. these are matters of high policy, but it is important to remember that diplomatic concert -- conversation depends on strong ties between our people. these are not built in a

vacuum, and they very much involve greater understanding and the steps we are taking to advance our national interests. we are making strides in deepening our government to government relationships, but we need to expand by promoting people to people exchanges that will help american and chinese people gain a better understanding of politics and society. this is particularly important in educational initiatives. the 10,000-strong initiative sets a specific benchmark for

growing citizens who understand china over the next four years. it is important to recognize the important role human rights plays. this is an important subject matter between our countries, and the united states continues to be concerned over the activities and the people they deem the threatening as well as restriction to internet content including the websites of foreign media of phillips. we hope china will take positive steps including release of the nobel laureate, and we will -- we feel it is important to address these issues responsibly and correctly. not only can these be seen in the context of the deep exchange

taking place, but in the first phase of audience -- first days of office, the level of exchange and engagement has made an important contribution to building an atmosphere of understanding and trust and helping us deal with common challenges. this will be the eighth meeting of our president since president obama took office and falls just a few months after the g-20 in salt -- seoul, and we have another opportunity to address the key issues, and both sides are working hard to make that a productive visit. it is clear we have achieved a lot, but there is also work ahead of us to make sure our relationship produces the kind of results both of our countries expect for our people.

we're actively producing our relationship. as we work together bilaterally and regionally and within our regions, we shape the landscape for the 21st century. the relationship between china and the united states will be one that will shave for from the 21st century, so thanks for your attention, and i look forward to our conversation. >> thank you very much for your insight full and comprehensive comments. let me ask the first question, and then we will open it up. despite what president obama has said and what you have said about welcoming a strong and prosperous china, there is a sense that maybe american people do not appreciate that america

wants to keep china weakened many of our actions are explained by a desire to keep china weak and divided, etc. i am wondering how you respond about that. >> it goes to the point of having a broader dialogue between our people, because i think these kinds of uncertainties are part of the fact if there is not as much transparency as i think they would like and need. we have to find ways to address this, and if there are concerns on the part of chinese citizens that we have a chance to explain the opposition. we think it is important to make sure all voices can be heard and not some.

we think a few points can be heard, that debates can take place and not just some voices. i think that dialogue is part of giving people the chance to air their doubts and have interaction that can help dispel misunderstandings and build trust. >> why don't we start with questions from a member of the press. >> thank you for this opportunity. on north korean, a lot of people are talking about the chinese pressure. i think this is not a new idea, and my question is what kind of leveraging the the united states have to put pressure on north ?orea

>> we have a shared interest in making sure they do denuclearization and stop engaging in a provocative behavior, so we have a common set of interests, and we need to find a common pathway for. we believe it is clear to all of us to make clear to north korea there are consequences to all of its actions, whether it is the development of nuclear programs or security council resolutions. at the same time, there is an opportunity if north korean moves in a different direction to have a more common perspective. we have done that. this demonstrates we do have a common view about what the objective is and we are able to work together, so i think that is the focus we have right now, and that would be the focus of

our discussions with china. it is our common interest that it is not going to be rewarded for provocative behavior, and if they relate to see a more provocative engagement with the other members of the six-party, that it could take steps to demonstrate. >> let's take one more. >> thank you. after the meeting with ministers yesterday, they had a meeting with the six-party talks. another question is how would you respond to the criticism

that the obama administration's policy is stronger than the bush administration and to provoke north korea to produce nuclear weapons? >> first, i think we have made clear we have not made it a productive to convene six party talks. we have seen that talks for the sake of talks do not produce the kind of thing we all need to seek to move in a stable and peaceful direction and that in order to create a context for discussion, we need to make it clear it understands that this is not one we are going to sanction. we need to see some evidence

that north korea is ready to move back into implementing its commitments under the 2005 joint declaration. we are ready for dialogue. this dialogue can be productive, but i think it is important to have a concrete indication from north korea that it is prepared to do something significant in context rather than just sit around the table. i am not sure i'd understand the policy except to say we are very clear that we have seen a pattern in which north korea begins to move into dialogue and does not fulfill if commitments, and i think that puts it in a more dangerous situation than it has been before, so our policy is to make clear that while we welcome the opportunity for dialogue and discussion, we need to see evidence north korea is

prepared to take a reversible steps to end its policy and provocation we will move on. -- provocation. >> we will move on. >> my question is in obama's phone call yesterday, they agreed the fragile security situation on the korean peninsula is not a problem -- if not properly handled could lead to further escalation of tension. they conduct an exercise near china that can be quite alarming and provocative on this issue, and also, as the u.s. conducts the largest military exercises near china, it is easy for china to seek them as using north

korea to target china. >> we have demonstrated the united states will stand by and that they have a capacity to respond, so it sends a clear message to north korea that it needs to desist in its provocations or there will be consequences. with respect to the implications for china, we have made it clear that our responses are being driven by north korean's behavior. this is the reason we believe it is important to work with us with respect to its nuclear program.

to the extent there are uncertainties about our intent, we would welcome more dialogue with chinese military authorities on a political level, but also on of people to people level, because we think it is very clear what our focus is. we will discuss why we are doing what we are doing and why it is driven by north korean's behavior, and the only way to ensure peace and stability in response is because -- is that the north will be free to engage in this provocative behavior common so we have to standby that. >> if the u.s. went out on a limit and engage in formal recognition of north korea as a

sovereign nation similar to japan and south korea, how these things that would change the dynamics? is that something that might be -- how do you think that would change the dynamics? >> we have made it clear we do not have -- that we are prepared for dialogue. north korea is a member of the united nations, so there is no problem with engaging if and when north korean demonstrate they are serious in moving in a productive direction. now there have been plenty of opportunities for the engagement to take place, and we would like to see a clear indication from the north that it wants to pursue a dialogue with the purpose of pursuing concrete results. we are prepared to address in the context of meaningful dialogue so long as we have an

indication korean it is prepared to engage. >> i know this friday the president is going to meet some dissident, and it is on the eve of the nobel peace prize ceremony. can you talk more about who the president is going to meet and in which room in the white house they are going to have the meeting? >> you may have noticed from the introduction, i am the deputy secretary of state, so you will have to address your questions to the white house. >> can you shed any light on how you would like china to make

clear to north korean at its actions have consequences? is this simply a matter of persuasion, or would you like them to consider doing things that may constrict their trade and economic relations with the north? you have any sympathy for what these academics say is part of the chinese calculation? that is to say that undo actions on their part could have a significant affect on north korea of a relatively fragile time in its history, and that it is undergoing a succession? >> i think it is something we look forward to discussing with the chinese. we want to get their assessment as well.

i think it is important to have that conversation with our chinese counterparts. in terms of fragility, our view is quite clear, that without a strong message, the necessity of north korean store exercise restraint is what is creating for agility. the dangers come from the fact there does not seem to be effective constraints on north korean, so we have to take steps to make it clear that the dangers come from provocative behavior, and rather than stepping back and tolerating it, we need to make clear there are consequences. i will share this with all our partners as we continue this dialogue. >> thank you, mr. secretary. i have a question. during your conversation, have

you ever gotten a message that china will unify under south korean rule. now you say you wanted to see both sides making progress in economic and other issues. i wonder what other issues. can you shed light on the context of what you just mentioned? >> we were encouraged by china's decision to support taiwan's's participation as an observer. we think there are opportunities to work together in places where membership since not based on being a sovereign state. we discussed some of the particular organizations. for example on climate change it would be of interest to all of

us, so i think there is a broad range of areas in which there is opportunity for progress in the relationship. with respect to the future of currier, what is important is that this is a decision we would like to see them engage in. that does not the appropriate way to resolve that. the right answer is for the two sides to engage. we encourage north korea to make clear it understands the seriousness of what it has done in recent provocations and will try to move forward on the basis of past engagements. >> we have time for one more question.

>> thank you. yesterday, there was a report that the senior officials accused china of enabling north korea to take provocative action, and it defines its relationship with south korea and japan and maybe creates an anti-china block in north asia. what are your comments on this, and you think wikileaks documents will have any negative impact on u.s.-china relations? >> we have made our position clear, and i am confident both sides understand the strategic interests we have a stake and we will move forward on that basis.

i do not tend to comment on anonymous sources. thank you all. thank you for being here. >> thank you all for coming. i would like to ask everyone to please remain seated until our speakers have had a chance to leave the room. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> welcome to the center for american progress, and welcome to the program on u.s.-china dialogue, the view from the chairmen of the foreign relations committee. a view of the senate foreign relations committee. our featured speaker, senator john kerry of massachusetts will be formally introduced in just a moment. today's program with senator kerry is the third in a public series on u.s.-china relations that included the deputy secretary of state jim steinberg and last week the chairman of the joint chiefs of staff admiral mike mullen. these ar part of a larger exchange between the center for american progress and the china-u.s. exchange foundation. our conference is being moderated by my colleague john podesta and mr. c.h. tong of the

china-u.s. exchange commission. so let me acknowledge john and let me acknowledge c.h. here in the audience. we welcome all of the participants of the congress, of the conference including senator tom daschle, u.s. secretary of state william cohen and now the chairman of the cohen group and professor wong g.c., the dean of the ititute of international security studies at peking university. they finished an exchange that looks at u.s.-china relations in a change be world. responsibility, risk and leadership and that well spruces our keyneat speaker here today. to introduce senator kerr set 4th united states secretary of state, formally the u.s. permanent representative to the united nations. professor in the practice diplomacy at georgetown university school of foreign service. the chair of the albright stoneridge group, the honorable

madeleine albright. >> thank you very much, i'm delighted to have this opportunity. distinguished guests from the people's republic of china and visitors and friends. i am truly honored to be able to introduce to you today a person whose name and faith and career are familiar to anyone who has been paying attention these past few decades. john kerry first appeared before the senate committee on foreign relations as a witness about 40 years ago. his hair then was dark brown, his face unlined and his words eloquent. one of the senators boldly predicted that the young man might one day himself become a committee member. today, as you will soon see, his hair is more distinguished, his face radiates the wisdom of

experience and here in his capacity, want as a member of that senate panel, but as i chairman. john kerry was first elected to the senate in 1984 and he quickly earned a reputation for expertise and world affairs and especially on matters related to asia. during my years as secretary of state i counted on his leadership, his superb counsel any his personal friendship. in 2004 i was very pleased to support his candidacy for president of the united states. over the years john kerry's words have lost none of their eloquence. as chairman, he has restored the foreign relations committee to historic relevance and prestige, and as a diplomat in his own right, he has played an effective and appropriate role in his contact with world leaders from afghanistan andhe middle east to latin america and east asia. he is one of those people who

truly give public service a good name, and i am very pleased to introduce to you our good friend, senator john kerry. >> well, i've heard lines calling everything and it's a wisdom of experience with an eloquent and polite way to put it. thank you. what a wonderful, wonderful privilege to be here today, thank you, madeleine and madam secretary for an extraordinarily gracious introdtion, and i want to just say how much i think everybody in this room will join me in saying thank you to you for your remarkable contributions to our diplomacy, to our thinking on the policy changes of the country and all of those issues facing the world and particularly, we thank you

for your recent work on nato which i think is so important and has been a huge pleasure for me as chairman of the committee to be able to rely on you for counsel, and input and everybody here just values your gracious statesmanship enormously. thank you very, very much for all you do. i'm also flattered and pleased that good friends are here from public service, people who know a lot about this subject which intimidates me even more to stand in front of you, but senator tom daschle, our majority leader and my personal friend of a long time, sandy berger who has counselled me and others for a long period of time and sherman and my good old friend, c.h. tong, thank you for leading this effort with this delegation and engaging with

everybody here. this is important dialogue and your wisdom, mr. chairman, has been an important part of our relationship, and i appreciate the counsel you gave me as a young senator when i visited hong kong way before the turnover, and we continue to appreciate your participation in this dialogue. thank you for that. the -- let me just finally say a special thank you for john podesta. the cap has grown into this remarkable organization that in a world where there is not enough thinking, helps us to find the time and forces us to think. we need a lot more of that in our policy deliberations. i was thinking driving down here that i enjoyed a few days ago as all of us had, a wonderful feast of turkey over thanksgiving which has now been changed into a rather deadly dose of daily

lame duck, and it makes me stop and think hard about how well our process is working and how stuck we are and that's some of what i will talk about a little bit here today, but it's really important for us to have an opportunity to discuss an issue that bears on so many of the global challenges that we face today and that's the relationship between the united states and china. it's been 40 years since henry kissinger first shook hands and frankly changed the world with that handshake and what we do in the coming months to shape our relationship with china is going to have a profound impact on the next 40 years and probably a lot of time beyond that. one thing is very certain, as we gather here. china the rise of china is no

longer an obstruction. it's not a provocative phrase for writers and scholars and policymakers to sort of sit around the table and anticipate in the future. it's as present as those remarkable skyscrapers that rise in pudong across the river over shanghai or as pronounced as the remarkable pageantry of the olympics that we all witnessed recently. china's economy is now, it is the second largest in the world and moving rapidly towards clming the number one position. it's grown almost 9% this year alone despite a global recession that has left our own economy stuck in neutral and with this economic growth, make no mistake, there has been a huge

increase in china's influence in the middle east. in africa, and latin america, across the globe, and to the awareness of all and the consternation of some, china is now bolstered by a military that is increasingly capable of projecting power throughout asia. now, while china has worked hard to orchestrate a peaceful rise, evitably this emergence as a world power has raised questions of intention and direction. earlier this year, china leveraged its dominant market position in the stand off with japan. later, china shocked the region by declaring the south china sea on par with tibet and taiwan, despite the fact that six

different countries he long laid claim to territory and to resources there, and just two weeks ago when north korea shelled the south korean island of yoeongpyeong china refused t condemn the north. instead, beijing actually warned our navy to stay out of the yellow sea, despite the fact that we were simply coming to the aid of an ally. so all of these actions have taken place against an often troubling backdrop. china's economic growth has been accompanied by an enormous and still-growing trade surplus with the united states, turbo-charged by china's undervaluation of its currency. in addition, china's no-strings attached approach to trade and aid has undercut our influence overstates like north korea,

iran and burma. and china's transparent, non-transparent, i should say, transparent is the wish. its non-transparent double digit increases in defense spending every single year for two decades are now raising questions about intentions. so it is absolutely not surprising that this new-found power has prompted anxiety within the united states and elsewhere, leading to legitimate questions about china's rise. i think it is critical, and i know a lot of my colleagues who stop and think about these issues carefully, think it is critical that we not allow speculation about china's ambions to easily degenerat and the fearmongering and demagog demagoguery. there are those who would like to push for a declaratn of

china as somehow an opponent or even a enemy. from the days of marco polo until the present, the fact is the west has often gotten china wrong. in the 1990s some insisted china was the next soviet union. of course, 9/11 very painfully confirmed that china was not the next great threat to the united states. in fact, over the last 20 years china has integrated itself, however imperfectly, it has integrated itself into the international rules and institutions that govern key issues like trade and non-proliferation, but progress, stated frankly, has not been as comprehensive as some people predicted. despite the dramatic growth of private enterprise, the government in china still controls key sectors of the chinese economy, and economic

liberalization has not led to significant political liberal situation. now even though china does allow freer expression today than it did 20 years ago, we need to remember that we're also talking about a country that has imprisoned lee shxiaobao who refuses to allow his family to attend his nobel peace prize ceremony. frankly, china's failure to safeguard the basic human rights of all ofts citizens especially those mtritical of its government, impedes its development and undermines its standing in the international community and the united states must continue to highlight that reality, but whether we're pressed or disappointed with china's progress, let me make this clear. the simple fact is we need china

and china needs us. we have to get this relationship right. after all, we're talking about our connection to one-sixth of humanity on this planet. the most serious problems that we face today from nuclear proliferation to global terrorism, to climate change simply cannot be sold by the united states new york stock exchange united states and its current set of allies nor ev one-half of the planet, and economically, economically which will be the great defining force of almost all of these issues, the fact is that our futures are already deeply intertwined and will remain so. if chin succeeds in rebalancing its economy, then the global economy will benefit and sowill we. if china fails or worse, if we

cut ourselves off from china in a mis-guided attempt to, quote, contain it as some have suggested, then we will all suffer, and even though we can't call china an ally today, we simply cannot treat it as an enemy. as winston lord recently reminded me in conversation, the first of his two lord's commandments are number one, thou shalt not demonize china and thou shalt not sanitize china. i think he's right. quite simply, we must not have a any illusions about china positive or negative. the most important thing we can do is really see china as it is. i know it's always risky for an american, and a politician to try and define anyf tha but i'm going do that nonetheless.

the first step in trying to see china without illusions is understanding that while china has become a great economic power, it still faces extraordinary challenges at home and abroad. when i met last year with two of china's next generation leaders and vice president ping and vice premiere lee chung, their mood was not triumphant. their mood was determined. why? well, just consider that china's government today is responsible for more than billion people. think about that, those are $1 bi 1 billion people who need clean air and clean water and right now many of them don't have those things. we sometimes have trouble taking care of 306 million or so people and we've bn industrializing for more than 100 years. about 400 million chinese still

life on $2 a day and inadequate housing. it's as important of the entire populations of the united states and japan combined and china's per-capita income is ranked about 100th in the world. so if it's a super power, folks, it's the first poorer super power in history. in the midst of this poverty, chines societiy is undergoing dramatic transformations. this country that once prided itself on legal tearianism is now experiencing vast income disparities. the government is trying to accommodate e mood of some 00 million farmers in the cities and the society is rapidly aging. by 2030, there will be 240 million chinese over the age of 65. that will make it difficult to provide retirement and health

benefits to the elderly without barupting the state or impoverishing working people. to fuel the economic growth that china needs, just to keep the lights on for the entire population, china faces a large and growing dependence on imported oil. sound familiar? 20 years ago, china was an oil exporter, but today china ranks second after the united states in oil imports at more than 4 million barrels a day and all of this growth, particularly in t energy sector brings a major cost. china's environment is deteriorating significantly because it relies so heavily on coal-fired electric power plants, china is now the world's largest number one emitter of greenhouse gasses, and in the frantic push for growth, china has sacrificed environmental preservation. as a result, land, air and water

quality have been seriously compromised. 16 of the world's 20 most air-polluted cities are in china and nearly 50% of river water in china is is unsuitable for agriculture or industry. these are just domestic challenges. china also faces a host of international foreign policy challenges. there was a time when china's leaders were encouraged to pursue an even-keeled and modest foreign policy. as deng xiao ping said china should hide brightness and cherish be on security, but more and more as i mentioned earlier, china's actions have beening any, but obscure. the truth is china shouldn't be worried about containment. it should be worried about overreaching and that's because its increased assertiveness has done more to remind its neighbors of the value of america's presence in the asia

pacific region than anything our diplomats could have done on their own. frankly, to see china as it really is is to understand that china doesn't yet know is, and this is a little presumptuous and acknowledge it, but i will say it, that china does not yet know what kind of power it wants to be and that it's still feeling its way on the world stage, that these kinds of challenges are something new to its leadership and something new to its public value system. so as president hu jintao prepares to come to washington next month, he has a good reason to seek a closer partnership with the united states. for our part, we will be seeking greater chinese cooperation on a long list of issues. in particular, we want to talk about north korea's rent provocations. beijing may think that it can restrain the north's bad behavior more effectively by

deepening trade and investment, but the north's belligerent conduct, the sinking -- t construction of an illicit -- and the artillery tact on yeongpyeong island undermines the poor interest and regional peace and stability. china has a fundamental responsibility to its neighbors and to the rest of the world. as a member of the p-5 and as a member of the power, and to not turn a blindye on north korea's -- over north korea's china does, and it has to use that influ tones bring the north's conduct in line with basic, international norms and china could send and should send a clear message to north korea. very simple message, its behavior is unacceptable. a good place to start would be strengthening its enforcement of

u.n. sanks and together china and the united states in concert with the south korea and japanese allies must find a way to resume the dialogue with north korea because sanctions alone would not convince the north to change course. we have the persistent issue of the value which economists is significantly undervalued. obviously doing that effectively makes u.s. exports more expensive and makes chinese exports cheaper, but -- and it significantly contributes to the trade imbalance. china's long-term interest are in changing that because it needs to build its own domestic consumer-or yented economy. in recent months,hina has begun to adjust that currency,

but, frankly put again, not yet enough. a sustained appreciation needs to happen, and it needs to begin sooner rather than later in order to help bring the global economy into balance. if the g-20 can't deal with this problem, then we need to look at otr multi-lateral tools, ones with teeth that can deal with it. by now it ought to be clear that the united states coress, all apart from the administration, we all have our domestic politics. the united states congress is growing increasingly impatient and it may, in fact, decide especially with next year's congress to take matters into its own hands. i also think we need to continue to press china on a global agreement to reduce greenhouse gas emissions. now i know that in the wake of our own failure last year that may not make sense t people, but let me tell you, if somebody's been involved in this issue since the first hearings

we held with al gore back in 1988 and in all of the negotiations we've had and as all of the science comes back faster and stronger in every single respect, it is clear that theimpleruth is that the united states and china together account for almost half of the world'semissions. china deserves credit, more in some ways than we have because they've made significant efforts to reduce their energy intensi y intensity, but these steps are not enough. we in china need to agree to measurable, verifiable and reportable reductions and emissions, and if we don't reduce our emissions and we don't move to cleaner energy, either of us will want only set off an unsustainable competition for resources on the global basis, but we will witness the impacts of climate change that will become unmanageable at catastrophic levels for all of

us. when we understand the full extent of china's challenges, foreign and domestic, it really becomes very clear that to demonize china and consider it the next great threat simply isn't based in reality. in fact, over the long run, i am convinced there is a remarkable potential for cooperation even as we have to deal with certain disagreements today. so how do we manage this complex relationship? over 40 years of engagement we learned that it's important to be flexible. that different types of problems require different types of tactics. we than on certain issues it's best to engage bilaterally in order to reduce the mistrust that lingers in beijing and washington about strategic intentions. we need sustained, high-level military dialogue. i'm glad that after aong hiatus a new round of defense talks is going to get under way later this week.

that's critical, and i hope that presidents hu and obama will pledge to insulate these talks from political disruption. precisely because this is a time of tension, whether over taiwan arms sales or an incident at sea, our military officers need to have open channels of communication any we will all be better off when we do. we also know that on other issues we'll be more successful when we augment bilateral engagement by weaving china into the fabric of international norms and institutions. the united states loses billions of dollars a year, billions in exports, because of china's failure to protect intellectual property. in 2006 china committed on the joint commission on commerce and trade that its government agencies will only use licensed software, but china has failed to follow through. in the next round of jcc talks

that takes place next week, i hope china is determined to move on this issue. the best solution may be to collaborate with other developed nations to convince china that its ability to innovate is being undermined by its failure to protect the intellectual property that it currently imports and increasingly china isdeveloping its property itlf and it's going to have an interest in making certain that that property is protected for its own interests. now while the united states is obviously not an asian country, let me make it clear that we are nevertheless a pacific country. there are days in the year when we remember that more vif edly than we do today on december 7th. on this day 69 years ago japan attacked us, triggering america's entrance into world war ii.

throughout the islands of the pacific, thousands of american troops daip gave their lives to protect our values and to protect others. this anniversary reminds us that we never want to return to war, but it also reminds us of the power of our engagement. today japan is a paesful democracy that we're proud to call an aye ally and let us never forget that the blood we spilled so many years ago allowed china to emerge as the nation it has become today. recent events on the korean peninsula on the south china sea, re-affirmed the importances of alliances that came out of that conflict and in forging new partnerships and strengthening regional institutions in order to maintain peace and stability. two good places to start in that effort would be approving the new free trade agreement with south korea and fully funding the state department's lower

mekong initiative, but we should also negotiate the transpacific partnership trade agreement in order to balance china's economic influence in the region. some have called this intensified u.s. engagement in asia, a hedging strategy and insurance against the possibility of china emerging as a regional hedge mono. frankly, i don't care what we call it. i just think it makes sense and we ought to do it. so much of our conversation about u.s.-china relations frankly centers on a lot of these abstract terms. we spend a lot of time talking about engagement and partnership, cooperation, hedging and balancing. obviously, we have to engage china. obviously, we want to fully ungreat china into the global community and yes, in the face of an uncertain future, there is a place for hedging as well, but if we're going to adopt an

effective china policy, let me make it crystal clear to any american that wants to rise to this challenge, that we have to first and foremost recognize that our greatest source of influence is our own power and our greatest challenge is to strengthen our own economic economic competitiveness, to see the u.s.-china relationship without illusions, you have to actually first see the united states without illusions. we have to focus on some concrete facts. here's one. the world economic forum publishes a global competitiveness report every year. for years, we led the world as a globally, most competitive economy, but in 2009 we dropped first second plates and th year we dropped to fourth place and this is in no small part because we're saddled with an enormous deficit with an

inadequate educational system and with a centy-old infrastructure in place. we have tohange that. we're going to sit around with all of the things ialked about being in theory is will be dependenon others for the technologies of the future. consid consider. >> i sometimes am baffled this, but consider this. china is the leading clean energy producer in the world. it wasn't ten years ago. we invented solar panels 50 years ago in the bell laboratories and we don't boast one company in the top ten of the world. china boast the largest solar panel industry which exports about 95% of its production to countries including the united states. in 2008 for the first time china attrted more renewable energy capital investments than the united states. in addition, the chinese government has a nouped

ten-year $400 billion clean energy investment program. in fact, folks, $600 billion will be spent in the next 20 years of clean energy investments and 90% of it is going to right now be spent in the united states. we're not in the game. that's true that an american company recently opened the world's largest private solar rnd facility, but you have to go to xian, china, to see it. as stephen chu sa and the secretary of energy, he said for centuries america has led the world in innovation. today that leadership is at risk. how do you ensure that innovation remains theallmark of america? tony blair said the talent is the 21st century's wealth? i think he was right. unfortunately, we're failing to educate and prepare americans for this globally competitive economy, so we need a much more aggressive focus math, science, engineering for our own people

and we had real problems when the microsofts of theorlds say the high-paying jobs and there's 59% of all u.s. doctorates and engineering and science are awarded to foreigners. i don't know how many of you read tom friedman's brilliant memo the other day in "the new york times" posing as if it were a wikileaks producer of information from the chinese embassy back to home, but you have to read it. it's brilliant and it tells a story of how we are sort of shooting ourselves in the foot and you may say to yourselves why is this relevant to what you're trying to say about the dialogue? i'll tell you why, because china makes its own assessments about us just as we make them about them. if one of their assessments is that the united states is sliding in this direction rather than that, that will have an impact on leverage and on cooperation and on the future. that's why i introduced

legislation to provide visas to immigrants, to immigrants who have a significant amount of capital, and entrepreneurs whose start-up ideas have the ability to be ab to create new jobs and attract u.s. investment. so this is critical for us. in addition, we also need to create new and strong incentives for the buildinglocks of economic competitiveness. roads, simple things, roads and airports that move goods rapidly. while we spend roughly 2% of gdp on infrastructure and china is spending 9%. they're investing $13 billion in another 25 new airports including another one in beijing. we've begun work on a brand new high-speed rail network that have 90% of the country's population, over $1 billion once it's completed. if our ability to move goods, energy and ideas is a century

out of date. you tell me how we say to businesses, this is the place to be. to help capitalize investments including from china in our infrastructure. i plan to introduce a major infrastructure piece of legislation early next january and we have bipartisan support, chamber of commerce, governor bloomberg, arnold schwarzenegger and governor rendell and others. this their is the step where i believe we have to move. it's one step for america to get back on the path of global competitiveness. just because i'm looking at what we can do in america, in no way am i excusing china for anti-competitive transgressions that are actually harming our ability and the ability of other countries to compete in a fair playing field, but i'll tell you this, even if china does revalue its currency, quickly and immediately, that's not a silver

bullet. it will not bring a flood of jobs back to the united states, and it will not instantly cause a rebound in the american economy. what's more important is that we decide what kind of economy we want to have and make that happen. i have faith that we can get is right, folks. the 21st century can be a century of american renewal at home and continued leadership abroad and it can be a century of opening up a remarkable new relationship between two enormous economic powers. we need to remind ourselves that it was our economic strength after world war ii that gave us the ability to become the world's super power. we're able to lift europe, japan and others all at the same time. we need to put domestic economic strength back at the top of u.s. national security agenda as well as the jobs agenda and at the center of our common purpose. the stakes could not be higher. at risk is our ability to

provide for the country and to promote our national security. and we have to understand the time for action is now. if we do act, china's rise will do nothing to diminish our own power. on the contrary, it will allow us together, to define the fullness of this relationship that i'm talking about, and china's rise will not disrupt the international system that we have build that will be part of it. in fact, china's participation in renewing that system and better equip it to deal with the challenges of the 21st century. that's what's looking us in the face. that's why this dialogue, c.h., is so important. the story of u.s.-china relations can be the story of defining the 21st century. it can be a story of genuine cooperation, of fierce coetition and of spectacular ground breaking human accomplishment. we're going to disagree

sometimes. perhaps even strongly, but i'm convinced that we can work togeth, that we shouldn't simply manage this relationship over the short term, but we should cultivate it and nurture it and believe in it. we have to resist the temptations of those in china and the united states, both places who seemed to relish a relationship that is defined in terms of conflict rather than cooperation. despite our differences, the two most powerful nations on earth have to find the common ground and in doing so, we can write the history of centuries to come. thank you. >> senator, thank you so much for those terrific and eloquent comments and insightfu too. we have about ten minutes for questions. so let me first turn to our visitors from china and if there's anyone that -- yes please.

>> i have a piece of paper here, you can sign on the dotted line and we'll get going right away. >> well, thank you very much, senator kerry. i want to commend you on your leadership issues of clean energy and climate change here in this country and worldwide. the last year when you were in beijing, you asked me about the data and how much of the power plant -- i didn't have -- i'm sorry, i didn't have the data for you, but i didn't have the data now for you. by the end of 2009 it was 8 giga watts of shutdown. that was just how much the entire power supply of a power generation and the entire united kingdom. this year added anoth ten giga

watts and that kind of shut down and closing of power plants did not come witut a price andt was very high, including the unemployment of tens of thousands and also investment of the companies do not have to pay and this year as you probably have heard is the prices can go even higher. with a lot of the local governments are forced to have power in many places and it also suffers from that. my question is just looking at -- looking ahead here in this country and when you think the government and the congress will have -- will offer that kind of political leadership ad the courage to convince the american people to ke such a sacrifice to fulfill a global responsibility at that time? >> thank you very much.

it's a terrific question, and i appreciate you're following up and getting the information very, very much. that's an impressive amount of power that's been taken out and the size of it, obviously is extraordinary when you think of it in terms of other countries. everything that happens in china happens on a larger scale, obviously, but let me say this. nevertheless, it remains a problem because those plants are being replaced by coal-fired power plants at a rate that is far in excess of what the climate can tolerate. the truth is this is not known. so you say when will you and the united states take the steps to deal with this? >> i wish this was better known. but the fact is not one coal-fired power not, not one, has been licensed in the united states for 20 years. and states where it would

surprise you, utah, idaho, kentucky, north carolina, are denying permits for coal-fired power plants. in addition, the private sector is ney goschi is negotiating on their own & so they're switching to natural gas and declining to go either into coal-fired power plant or to switch their coal-fired power plant into newer, clean coal technology and they're moving into clean coal. i think we'll have a resurgence of nuclear in our country because i don't think there's any alternative in the near-term for reduction, but in this next congress, we will have a major debate over energy policy in the united states and we will, even though we may not have a cap and trade mechanism which prices

carbon, we will have very significant mishs adopted. i'm convinced that will move us toward energy efficiency as we are doing energy reductions and we will have energy efficiency and we'll have major conversions of our trucks to natural gas conceivably and we will have building efficiencies built into our codes and we will do various incentives for alternative and renewable energy. we will most likely set a renewable energy standard for the united states. i think all of this is achievable in this next year. so each though we may not have the cap system, we may get an almost equivalent level reduction of emissions as if we put that trading system in place providing we do the right things in th legislation. final comment i would make to you, also not well known.

when you say when will the united states begin to do this? you should tell your leaders, please, on our behalf that over half othe american economy today is already under a vol you wa wantary mandatory reduction system. we have a program called reggie, the regional cooperative system and massachusetts is one them where we are committed toa a trading system to reduce emissions. in the midwest, you have four or five states that have joined a compact and in the we, they succeeded in beating back a referendum for them to proceed forward with clean standards, clean emission standards and california, oregon, washington and british columbia are in a compact to proceed in a trading mechanism. so over half of the american economy is already voluntarily

reducing and wanot even waiting for the united states congress. i believe that will grow in the next year and i'm determined to make it grow because we'll go out to the country with a national effort to educate and organize and do what we did back in 1970 when 20 million americans came out and demanded that we do something about rivers that would light on fire and water quality that gave people cancer, and our citizens demanded that we do something. so in 1970 those 20 million people translated that into action and it resulted in the clean air act,he clean water act, the safe drinking water act and we made enormous progress. we're going to rekindle that effort in this country, so, please, we're just getting going and we're going to continue this fight. >> yes?

>> francisco rodriguez. i would like to thank senator kerry for this interesting conference. i missed one topic in your conference, and it is the question of how do you think that diplomacy with effect with the relation and china could express the chinese power is working quite hard and at the same time -- for instance, the usia is dismantled in the '90s and there are -- >> thank you. i think we've got it. thank you. >> well, i think -- look, we're going to have a combination as i said in my speech. i made it very clear.

there are some things where we'll disagree and we may have to take tougher steps even as we build a stronger, broader, bilateral relationship. some of it will be diplomacy and some of it will be a little harder. obviously, we don't want it to become a fundamental relationship of conflict which would take us into some dangerous places with respect to the kind the kind of democracy we conduct. you know, that depends really on the good will of both sides. i think if we can restrain ourselves from making the mistakes that i defined the potential of making, defining china as an enemy and going off on some conflict tangent, i think we have unlimited possibilities. but china has to respond china has to also accept a new level of responsibility. one of the interesting things when i was in china, i -- i was talking with the foreign minister there. i wanted to learn more about how china picks its leaders and what

the process of succession is. and i must say i -- about a half hour answer that it was intriguing to listen to the ways in which there's a sort of continuum, if you will, of guarantees, of competence, but also guarantees about a kind of similar thinking. the cultural revolution, obviously, was a shift from that. and some people suggest to me that maybe, mayb in the transition that's taking place now, there may be another shift. and that could greatly change the possibilities of tis relationship. 7 of 9 positions are open. and there's a big transition with a new president, new changes taking place next year. and elections. and so i think we have to kind of recognize that this year, just as in our -- our politics last year, we're leading up to

an election. it's very difficult in election mood to define the future direction of any country. and i think for the moment, some people are going to be very cherry of opening up themselves to any public criticism by offering come sort of definition that could be different. so i don't anticipate between now and next june, frankly. except perhaps some progress on the issues that are going to be on the table when the president visits here in the next days, which i think the can be anticipat anticipated. beyond that, i really think that this next year will define a lot for the next ten years of our relationship with china. >> and i -- we have time for just one more short question. yes, in the back. >> louise diamond.

>> no,hat's all right. >> hi, i'll be the man. i'm rob dubois. i'm a security advisor. senator kerry, thank you for ming. i approached you after a flight from afghanistan some -- a couple of years ago. you we -- the first time i saw with you unshaven. an extension of the soft power discussion, do you think there's a positive arms race, if yo will, on the sought pft power? china is pressing really hard on a campaign of soft power. could there not be a globally benefici race for soft power in the world? >> well, there could be. look, i think i don't want to define it in the context of a race. i don't want to define it in a context of competition. i think these are the kindsf things where china and the united states can cooperate so effectively. but we're already doing those things. look what we're doing in africa with our global aids efforts and look at what we do in terms of

children around the world or our efforts with respect to violence against women and other things that we're engaged in right now. i'm very proud of what our country is doing. it's not a competition. we're doing it because it's what we believe with respect to our values and how we think the world will be safer in the long run and how we live up to the promises of our -- of the best of our diplocy. i think that china, if i can say, has been excessively engaged in a mercantilest manner in too many places. i've been in sudan and pakistan and afghanistan and so forth. i see china, but i don't see china reenforcing the kinds of things that we're engaged in to try to stabilize or make life better. i see china there guaranteeing its resources and guaranteeing its chain of supply. ani think that's one of the

things that i would say in terms of accepting this new responsibility that comes with its emerging economic power. cannot just be economic. if it is, i respectfully suggest to china they will wear out their welcome in many of these countries very, very quickly. and so i hope we can both cooperate in this without making it a -- you know, anything equivalent to a race. but to a mutually agreed upon set of interests by which not only do we benefit, but the communities that we're involved with in the rest of the world benefits also. that's the n role that china can play. and i think a lot of us are sort of seeing north korea as the initial definition of china's sense of their responsibility, if you will. >> please join me in thanking the senator. thank you very much. [ applause ]

thank you all for coming. i'like to ask the audience to remain in your seats while our speakers have a chance to exit the room. thank you again.

>> for more than 15 years robin wright writes for the l.a. times. you put together this book, a lot of different points of view, the power, politics, economy, and policy towards iran. what are some of your conclusions? guest: i think we try to bring together a cross section of analysts from think tanks, former weapons inspectors, and the top iran official in six administrations to reflect on the different aspects of what do we do about iran, what's going on inside iran. i think some of the conclusions are that over the past 18 months particularly, iran has become increasingly militerized in order to push back on a very vibrant opposition movement. that it is, as we all know, medling in neighboring countries such as iraq and afghanistan. but also, hezbollah in lebanon

is increasingly trying to exert its presence, also reaching out to places like venezuela and bolivia. some of the unlikely allies. countries in africa as well. iran sees itself as leading a movement that is not just in the islamic world but in the developing world as well. host: more recently the roots of our relation dating back to the shah in the 1979, 444 days of americans held hostage, the carter administration dealing with that and every administration since trying to come to terms with iran, trying to negotiate. but you call it a con on drum. guest: it is because we have conflicting interests at this particular junk sure. we just renewed the effort at diplomacy with talks last week in geneva between the world six major powers and iran. and of course the primary source of discussion is over iran's controversial nuclear program. and the sense that in the next couple of years, it could cross

a threshhold in terms of its capability. not necessarily making a bomb but having the capability if it wanted it. but at the same time, the outside powers are concerned about this, the internal situation. and the opposition that is for the first time showing itself in public ways. and it's going after the same things that the united states wants to see more freedom of the press, fair and accountable elections, participation by both men and women in the political system. and so it's trying to deal with iran in the nuclear program and keep it contained without liegetmiesing it in a way that will then pull the rug out from underneath the opposition. host: let me take three areas. the shipping lanes that pass through iran and its potential impact on the world's oil supply. guest: well, iran is a very important strategic property. it's the 18th largest country in the world and it borders the three most volatile other

regions, the middle east, the caucuses and south asia. and but it also has control over, as you point out, the shipping lanes through the straits of hormutsdz. and if it wanted to. it could try to cut off access to ships. i think it would be very difficult because the u.s. navy is also there in large numbers and iran knows it would pay a price for that. plus its economy is based on the export of ile oil too. host: militarily the largest army in the middle east. guest: the largest. it doesn't have the strongest capability because of israel but it has the largest in terms of numbers and one of the largest arsenals. and some of it is with the help of north korea domestically made. they've gotten technology they've purchased from the pakistanis but most importantly north korea and they are developing a missile capability particularly that could hit europe. host: and point number three.

how do you blend islam and democracy? guest: well, iran was always the great or the first experiment in how do you blend islam and democracy. and that's the challenge we face throughout the islamic world. this is the last block of countries to hold out against the democratic tide that has swept the rest of the world. and iran has a ven near of democracy and then it has elections and everyone votes from the male and female from the age of 18. but it's also a very limited democracy because all candidates are vetted by a group called the consul of guardians. whether their cred dentials are islamic enough, whether they meet the kind of standard for candidates. there were 42 women who registered to run for the presidential contest last year in june 2009, they were all disqualified by the council of guardians. but at the same time, there has been such female activism inside iran that the group had

to acknowledge that women had the right to run. so that was an important threshhold. but we see that the regime, because of the accusations of fraud and vote rigging in the last election, which put mr. ahmadinajed back in power, this has become a very contentious point and led to the largest show of people power in the region in modern times. host: if you had an honest discussion of a cross section of iranians, how would they view president acminjad? >> we make a terrible mistake in the west trying to characterize or lump them together in the stereo types. clearly he is a very controversial leader not only among the opposition but also from even many conservatives in parliament who has challenged some of his decisions. he has been involved in some gross economic mismanagement

which mazz made has made life much tougher for the average iranian to make ends meet. so he is controversial. it's the economy stupid, the same kind of issues we face in the united states. so those are the thing that is concern i think the average iranian more than anything else . host: our guest is robin wright. she has traveled to more than 140 countries. she is the editor of the iran primer. she has also been the author of jihad against the jihad. >> no. that's a book that's coming up. we changed the title. rock the cazzba. and it's going to come out just before the tenth anniversary of 9/11. host: so from this and your recommendations, if you can give recommendations to the united nations and the obama administration? guest: there are six chapters on u.s. policy and the various options. engagement, containment, sanctions, the military option. and it's really interesting that the wide variety of views

that are captured in this book, no one believes that the military option is one that is attractive, feasible, we know less about iran's nuclear program today than we knew about iraq's nuclear program on the eve of the invasion. there are deep suspicions. but it's about its interest in developing a nuclear weapon but it's largely by deduction. what facilities do they have? what have they not been willing to talk to the united nations about, the weapons inspectors? scientists that are off limits. so i think that one thing that's striking in terms of u.s. policy is that going to war with iran would be far more complicated than either afghanistan or iraq. and that we don't know enough about its program to assure that a military strike would actually do anything more than set iran back by a year or two.

host: our topic is iran and our relations with that country our guest is robin wright. if you want to get more information on the iran primer, part of the institute of peace on its website, which is where our guest is affiliated with. michael from maine. good morning. caller: good morning. my question, well, my comment is i guess i wonder what makes the united states think they can go around the world and police everybody? you know, and why would we believe, like mass destruction over there in the war, the first war we got into with saddam where we went in there on false pretense, and now here they are going after iran on basically the same thing because they make a nuclear power and this. what's it our business? guest: it's an interesting question. and one of the historic fact oids is that all the way back to the ford administration, the united states has agreed that iran had a legitimate need to

develop a nuclear energy program, a peaceful program. iran claims that's all that it's doing. but there is enough doubt among u.n. weapons inspectors and the fact that iran has not come clean about its 18-year secret program that there is concern that iran is working on developing its own nuclear weapons capability. in terms of the role of the united states, the reality is that in the post cold war world, washington is the most powerful capital in the world. and iran also has a greater interest in dealing with the united states in part for that very reason than it does with any other country. host: next, john from fairfax, virginia. good morning. caller: good morning. i want to thank you, steve, for all the work you do for the portion of the radio. host: thank you for listening.

caller: i listen to that. and i recommend listening to c-span rather than watching on tv. you can get more done. but as far as iran goes, this is one of the oldest, wisest cultures in the world, pesha. -- persia. and we took away their opportunity for democracy when we killed a democratically elected leader and installed a police state. iran has every right in the world to have a defensive weapon. iran is just saying we don't want to -- if you're going to -- we are willing to fight back if you mess with us too much. it's like don't mess with texas. you know? let them be a proud country and integrate them into society and give the people the right.

host: john, stay on the line because as you were making your comment jim also had tweeted in this point as well, which is along the lines you said. john, your thoughts about that and we'll get you to respond to jim's thought caller: absolutely. america has tried to control the world. we took out saddam because he wanted to price his oil in euros. he would not cow down to american power. and so we killed americans to kill him. it's crazy. host: thank you, john. guest: a number of different points. he talks about the very strong persian nationalism. to understand iranians, think of the most shaufnistic texan you'ver met and add 5,000 years. there's a sense of national

identity. and iran is a -- it think it can do it again. in terms of the united states, yes, both united states and britain played a pivotal role in 1953 in forcing the epped of a democratically ellene elected government and bringing the shah who fled to roam back to the country. iran tried to open up its political system and have a democracy or greater political participation. and after since 1953 there has been this real bitterness about the u.s. role. most americans don't know about it but every iranian does. and that of course has put the united states in a negative category in the eyes of many iranians. host: two headlines from the "washington post" this past tuesday and wednesday, major powers and iran hold constructive talks. but the headline on wednesday,

little progress seen as the talks with iran come to an end. what's the story? >> well, i think the important thing is that for the first time in 14 months the iranians came to the negotiating table and they met with the world six major powers who are leading an effort to try to force iran to be honest about its program, to give access and to cooperate, to find a compromise. the negative side of the story is that very little was accomplished. we're still engaged in a process. and in many ways, we're further away than we were in october 2009, the last time we met, because then there was a deal on the table that would have started in a tangible way cooperation between the two sides. now there's not even a deal on the table. they're just talking oobd talking and it looks a little bit like the dragged out peace process between the arabs and

israel. there is a clock ticking. looming in the background is israel and its fear of iran adds an capess tential threat if it should develop a nuclear weapon. but for the time being one of the things that's important is that iran lives in a neighborhood where five of the nine nuclear powers reside, and it feels quite vulnerable. iraq used repeatedly chemical weapons against iran during its eight-year war, the bloodiest modern middle east conflict so iran feels very vulnerable. despite its intense hateful rhetoric about places like israel, iran also knows that if it should opt to use a nuclear weapon, that it would pay an enormous price and face a nuclear response. so for the moment if it has what many people suspect, it would probably be as a deterrent capability more than an intent to use it. host: our guest is a graduate

from the university, she works for the united states institute of peace. ken is joining us from florida. welcome to the conversation, ken. caller: thank you and gorne. ms. wright, in response to your last comment, if i may read some comments from what bar bra slaven once called a moderate who indicated that his calculus was that if he laufpkd or iranians launched an attack against israel with nuclear weapons they would kill 5 million jews and if the israelis did retaliate by bombing iran, there would be probably somewhere in the vicinity of 20 million muslims killed. but after all there are 500 million muslims.

so his calculus was that it would be a small sacrifice. also, the president never mind israel threatened america and europe. his comments were, and i quote, our missiles are now ready to strike at their civilization and as soon as the instructions arrive from the leader, we will launch our missiles at their cities and installations. end quote. is the associated press 40. 2004. what i would like to point out, as much as we arm our policemen, we do not arm our krnls. and the essential condition is that ack man din jad, who has destroyed the economy of iran and is according to these wickie leaks that came out, most of the sunni muslim nations around iran would be more than happy to see the united states or for that

matter israel destroy the nuclear facilities in iran. host: i'm going to stop you there. you put a number of issues on the table. thanks for calling. we'll get a response from robin. guest: i think on the military issue, no military strike is going to be simple in part because we don't know a lot about where iran's facilities are. some of the them are believed to be deep underground. but it's not simple because we have significant military deployments in both iraq and afghanistan. and u.s. troops there could be vulnerable to counter strikse. and so any military operation, particularly by the united states, would have to go after more than just the nuclear facilities. and that then becomes to look like a widespread war, not just a response to its nuclear program. host: on that point, would china support, would china provide support to iran in the case of u.s. military action in that country? one of our questions from a

viewer on twit sner guest: you know, we're talking about real hypotheticals here and it depends on what circumstances the u.s. might engage. so far the military option is left on the table but the administration has repeatedly said it wants a diplomatic solution. china is iran's very important trade partner now and it also buys 12% of its oil resources come from iran. and so this is an important relationship. china and russia to a certain degree as well have also blocked tougher sanctions at the united nations. but whether china would come to iran's military aid i suspect is doubtful. host: back to your calls. michael from north carolina with robin wright of the u.s. institute of peace. we're focusing on iran and its role not only in the region but globally. . .

♪ caller: has most iranians -- i knew some when i attended the university of colorado in 1979 when they shah fell and they were very pro-american.

most of them came from the aristocracy they were sons and daughters of military. we really have no leverage in terms of negotiations. diplomacy, in my mind and i am just a keyboard diplomat, we have no leverage economically or militarily to get iran, to get, then a job to do what he wants -- what we want him to do. to get mahmoud ahmadinejad to do what we want him to do. are these negotiations, are these talks really just theater, diplomatic theatre? we have no political or economic leverage to do what we want them to do? guest: that is a good question.

the important fact in the negotiation is that there are so many other countries involved. the european union in particular has enormous leverage over iran because several of its member states like germany and france, italy have a very significant business relationships. bilateral sanctions by the united states have almost no impact, the europeans have significant impact. they passed their own tough sanctions this summer and this has had an important effect on the iran business community. there is a new experiment that the united states is trying. the former -- is a form of sanctions but it is not related to nuclear programs. in the aftermath of 9/11, there were new international banking laws passed in part to make sure that money was not laundered to get to extremist groups. the treasury department has

launched an effort by stuart levy to get international banks not to do business with iran because it is not complying with these new banking standards. there are over 100 banks around the world including places like china that are no longer doing any business with iran. this makes it very difficult for tehran to acquire the kind of raw materials it needs for the industry to send exports out and get letters of credit. it is those kinds of restrictions which have actually had far more impact than the classic formulation of sanctions. host: a couple of quick e-mails -- countries in the middle east will never change. history has told us desperate we need to stop policing the world. look what happened to the soviet union. these wars will destroy us economically guest: i share some of that concern in terms of economics.

we are in serious economic trouble in part because we use some of our resources to pay for those wars. we are in tremendous desperate i share that concern. in terms of policing the world, the reality is we are the major power in the world and we're the one that everyone turns to at the end of the day. the iranians actually what -- want relations renewed among the people are . if the regime engages with the united states, they think it would change the iranian pariah status. host: we were talking earlier about former president jimmy carter another, your says the roots of the iranian problem is not the jimmy carter.

the iranian president was assassinated in the early 1950's. guest: was not assassinated but he was forced from powerthe hsah had fled to rome --the shah had fled to rome. it was a c.i.a.-orchestrated movement. it led to demonstrations on the street that forced him from power and allowed the shah to return. that is something that resonates with the iranians. it is still commemorated today. host: when the meetings resume with a red in january, what is the goal? guest: iran has the right to

enrich uranium under the non- proliferation tree. they argue they are not violating international law or any treaty. they do have a leg to stand on per they lied about a military program for 18 years and has not provided adequate answers about what they were doing and where they were doing it and allowing full access to both scientists and facilities. this is the core issue that will be discussed. the concern is that the two sides are coming to this negotiating effort from totally different perspectives. the iranians are saying that they want to talk about a nuclear-free region. which means israel as well. the united states and its allies are going in and they want to talk just about the iranian program. host: next call is joy from portland, oregon. caller: this week, there is a

lot of information about our debt. i was listening to cnbc and erin burnett said our sanctions are not serious. we have actually sold our treasury to borrow money from iran. they are one country along with audi arabia and other estimations in the middle east. iran is one of them so we are not only borrowing money from iran to pay our debts but now they will have to borrow from the united states wealth, they had funds and the wall street people. we have to borrow that money in order to pay our debt. we have to pay for these tax

cuts for the wealthy. host: did you watch the documentary on cnbc? caller: yes, we have interests there. host: is it kish island which could be a source of -- it could be a pipeline for economic revival with the united states in iran? thank you for calling in. guest: i did not see the documentary. we are not borrowing money from iran. we cannot. we do not do business with iran. an interesting thing is that every transaction that involves u.s. dollars, for example the selling of oil in u.s. dollars, has to go through a u.s. bank. that is because it is a transaction involving dollars. it is called a u-turn and the

united states has recently prohibited sex of iran's -- thanks for iran's doing this. we deal with humanitarian goods, medical supplies, and educational materials. those are the things that are exempted from sanctions. host: our twitter page -- what are we really trying to accomplish? that is getting more dista since the cold war? . guest: tensions are arguably greater between iran and the united states. the obama administration has decided that they are prepared to renew relations with iran but under certain conditions. s cooperation iran' with the united nations on their nuclear program.

this is a quantum change. we have gone through periods of tension were neither side has wanted to deal with each other. even the bush administration toyed with the idea of opening eight u.s. interest section. --a u.s. interest section. host: charlotte, n.c., good morning. caller: good morning and thank you cspan and good morning, robin. i think the real issue this comes down to her regarding national rate -- natural resources. under the disguise of imposing democracy, how does this country justified demanding a country to be defenseless so that we can in turn go in there and privatize their oil fields and take control of the strait of hormuz.

i think this is what the agenda is and to lead bp's back in there when they were in there in the 1950's and were ex spelled out of iran because they were pillaging their natural resources and running off with the profits. how you demand a country to be defenseless with that agenda in mind? guest: iran is far from defense list. it has a sophisticated missile program. they have an enormous military parad y have the revolutionary guards and the military. they have a very strong ability to defend itself not from a power like the united states but it can wreak havoc in the region. the issue of oil is interesting. much of america's interest in the middle east ultimately does relate to the fact that we have a dependency to fuel our industries and automobiles and

homes with oil products. for that reason, the united states will be in the region militarily regardless of what happens with iran for a long time to come. we have a major naval presence in the persian gulf. there are about 50,000 troops in iraq and more in afghanistan. we have quite a strong presence in that region in part because of our own economic self- interest. host: our conversation with robin wright. she has put together a book with other people to look at iran. ms. wright talks about other as meddling with iran. doesn't she see the united states meddling as well? the u.s. needs to return to

being a signing city on the halle berry we need to lead by example guest: the iranians feel vulnerable because there are so many troops on both of its borders, afghanistan and iraq. in 2003, there were as a diplomatic overture by the iranians because they feared they might be next. needless to say, we are in afghanistan because of 9/11 and the fact that the taliban hosted al-qaida and made it into a base for extremist activity all over the world. iraq you can debate forever. i had reservations before we went in there because i thought we did not know enough about what they had. clearly, there are many in the region who are angered and frustrated or opposed to the u.s. military presence in the region. until we develop alternative energy sources, the reality is we will be there for a long

time, places like saudi arabia will be dependent on the united states in the event of anything happening as a significant threat to the royal family. host: nuclear power plants and electric cars would boost our economy by freeing us from a dependence on mideast oil, says another viewer. guest: alternative energy as a way to combat extremism. we want to bring up a generation that understands the broader ideals and the kind of standards that have been adopted internationally in terms of what is appropriate with human rights and political participation and social justice. host: are there any backdoor negotiations with iran like north korea? guest: for many years, there were track two efforts and those are important in terms of helping iranians and americans get to know each other again for the first time. it involved things like

wrestling competitions and other sporting events. there were exchanges between film makers and science tests. but those have pretty much ceased under -- under mahmoud ahmadinejad. they prolonging iran-iraq war was very taxing. use up openings that began when presidents rafsanjani. since mahmoud ahmadinejad was elected, iran has cracked down on his domestic policy as well as it -- as well as its relation with the outside world.

this is arguably the hardest time for diplomacy but also the most important time because of around's nuclear possibilities. host: michigan, republican line, good morning. caller: and spent time in the region, there is a capacity but i have not paid attention to the blockade in the straits of hormuz. and do we have the capacity now -- i know we can do the blockade but can we actually protect the saudi oilfields? downsizing back in the 1970's, we had over 300 surface warfare on the east coast alone, ships, and now i

understand we are less than half. it becomes to a blockade, can we protect the saudi oil? guest: one of the important policy options is containment. containment can mean many different things. can mean trying to prevent through sanctions around's and access to certain kinds of technology. containment in a bigger form can mean the deployment of ships so the u.s. interdicts andy ship that might be bringing in controversy military equipment. that is much tougher. that will be costly and open ended. it may be what we end up doing. short of a military strike. most presidents have tried to do in different forms since the end of the hostage ordeal in 1981, because we have not been able to deal with iran, we have tried to

contain the scope of its intervention in the region, its acquisition of certain types of technology and its exports. we have not done that well with containment so far. a new containment would involve far, far more. that is at a time when we are already fighting two wars. it would bring its own costs. host: where does the funding comes from for your institute? guest: the usip was congressional mandated and gets some of its funds from the government. i don't know what percentage. maybe all of it. i am simply a fellow regional specialist. at but the institutions. they both of government ties. host: your focus includes iran, southeast asia -- this program

is carried live on the bbc channel. we welcome your participation. caller: hello, i wanted to ask -- can you hear me? host: we sure can. caller: i wanted to ask, what is your opinion of the bush administration -- the obama administration's handling of the iran situation? how has the strategy worked so far? is it working? i want to quickly quote a recent article in the economist which states that the bush security team gives the president credit for strengthening sanctions -- host: i think we lost his connection. guest: i get it.

the obama administration, its policy toward iran has two simultaneous tracks. one is to continue pressure on iran to try to get it to cooperate and that the same time it is engaging. no one likes to talk about carrots and sticks. that is what the bush administration tried. that is a continuation of that, basically. there is already talk that if iran does not come to the table in january for substantive talks, that there will be a beginning discussion about additional sanctions on iran. this is a way of saying that we want to engage and resolve these problems but we also don't want an open-ended process for fear that iranians are engaging in a kind of diplomatic dodge ball. host: last call from virginia beach, good morning. caller: thank you for cspan.

an israeli strike is not really realistic if you look at the distance from israel and the avenues they have to take to conduct a strike, take into account the air defense and all these other complexities and refueling. look at where it is. it does not seem right. iraq would have to be part of the avenue and saudi arabia would have to be part of the avenue. what is the chance of it the israelis striking any part of iran? "something went wrong? what if something went wrong? guest: first of all, the obama administration has been talking often to israel about iran and

trying to urge it to give the u.s. effort, the international effort, more time, not to move in the next few months or in the spring if there is talk in washington. any kind of -- any kind of military operation for israel would be difficult. they can refuel their bombers in the air. some of these issues about range may not be as relevant as one might anticipate. i am not a military specialist but i am told israel has the capability if it wants to, to strike military say -- militarily on some of the iranian nuclear plants but for how long and how much? with the united states be blamed for it anyway whether it is american equipment or israel is our strong ally. will we carry culpability? will we bear the brunt of a possible response? the israelis are very serious

about their concern about iran's nuclear capabilities. they are serious when they talk about military option being alive on their table. i don't anticipate we are likely to see that in the next year. host: make a back to your book. -- let me go back to your book. no nation can ill afford to ignore iran and iran internally views its nuclear program as a symbol of greatness. guest: they also viewed as an issue of sovereignty. they view this as the outside world trying to control its ability to fuel its peaceful nuclear reactors and they don't think that's a legitimate right. the world does not do that with any other country that has nuclear energy. iran is a country that cannot be ignored because of simple things like its demographics. it has a strategic location. it is so close to so many areas.

in the three areas around iran, the middle east because of their involvement with groups involvementhamas or hezbollah, or in south asia or in afghanistan or in the caucuses

recession, the

total level of job losses far exceededhat of downturns in recent memory. as a result, the ranks of the unemployed exploded over a short number of years. even more people are involuntarily working less than full time or are too discouraged to be counted among those looking for work today. another alarming piece of evidence is that the share of the unemployed who have been out of work for six months or more is at an all-time high most experts and expected economic recovery to be slow and for job growth to be anemic for years to come. this is a disturbing forecast because persistently high unemployment rates combined with the problem of long-lasting

on the planet for many poses serious -- long-lasting unemployment for many pose serious threats. the unemployment programs to address these problems were designed in different times. they are not up to become a challenge. the urban institute has launched a program of rigorous research to inform the policy debate and to inform policy development on this set up unemployment chalnges. are thediscussions first in a series of forums on unemployment and what to do about it that we will be holding as part of this initiative. deprave you a couple of upcoming fall when -- upcoming forums, on january 5, we will be looking

at the challenges and concerns of to particular groups facing unemployment challenges, and people trying to it did the job market and older people -- tried to enter the job market and older people who had hoped they work at getting the job market. on february 23, our focus will be on how the safety net should be retooled to operate more effectively in times of high unemployment. today, what we will be discussing is why job creation has been so tepid in the current recovery. what we know about cost effective strategies for expanding jobs and what public policy can and should be doing to jump-start job creation and demand for workers. we had a terrific panel to

tackle these questions. i am hoping that the conversation is more on what we now or think we know about tacklinghese problems rather that on how discouraging the problems are. our panel in alphabetical order is a senior economist at the upjohn institute for employment research. he focuses on local labor markets. he is the author of "jobs for -- "jobs for theo poor." bob is the economic education director for the federal reserve bank o richmond.

cliff johnson is the executive director for the institute of youth education and families at the national league of cities. that institute's core concern includes education, youth development, child safety, and family economic security. he is the co-author of two books on labor and social policy. bob lehrman is an economics professor at american university. he is an expert on how education, employment, and family structure which together to effect economic well-being. our moderator is an economic institute fellow. previously, she was vice president for governance at

the center for political and economic studies. i would like to thank everybody for joining us today. i invite you to come back on january 2010 and february 23 for the next two sessions in this series. i will hand the program over to margaret. >> thank you. as was indicated, this is not exactly an unprecedented economic situation. it is highly unusual. three years to the month after the recession started and 18 months after the nber says that it ended, we find little acceleration in jogrowth. we are also at the end of the federal fiscal stimulus package with just a few more months for many of the funds to be utilized. the question is, what do we do now in order to jump-start job

growth? we have had less -- we have panelists who will present ideas. >> thank you, margaret. thank you to the urban institute for hosting this forum on this important topic on the job creation. my focus is going to be on how the u.s. can immediately create jobs on a large scale in a cost- effective way to a job creation tax credit. we need more cost-effective got creation policy because we are short 10 million jobs. if we want to get that the employment population that we had at the beginning of the recession -- if we have an unusually rapid job growth, it will take at least five years to

cle this job gap. this job that has significant long run economic cost not just social costs. 1/5 of the involuntary unemployment becomes chronic, which aren't -- which probably lowers the capacity of our economy. stimulus is important for job creation. only indirectly increas jobs by increasing output. that created fiscal stilus is at least $100,000 per job created because that is the average ratio to output to jobs. the most recent tax cut deal between the president and congressional republicans had an estimated cost of a hundred $58 billion. according to the center for american progress, the job creation will be 3.1 million

jobs over the next two years if you look at that and do the math, because per job here is about to let the $75,000. job creation estimates are conservative. i should also note that the recent tax cut dealas benefited those job creation. still, the cost is high. more cost effective job creation strategy is required that we target job creation. what is public service jobs, which cliff johnson is going to talk about. there was a proposal that i wrote in a paper. the obama administration proposed a similar tax credit in early 2010. this proposal was not enacted. instead, congress adopted a proposal by senator schumer called the hire act, which is

less effective. that act provided tax credits for hiring the long-term unemployed. we should start over and adapt a true job creation tax credit. if enacted today, our proposed job creation tax credit could work as follows. the credit would provide any employer, whether for-profit or nonprofit, with a 15% tax credit for net real peril expansion in 2011 and 10% in 20 -- in net real payroll expansion in 2011 and 20% in 2012. using payroll expenses means the credit would not be received if they simply hired to fill a vacancy created by someone quiting or firing. the employer has to expand payroll. the fact that the payroll --

that the credit is not paid on all payroll, reduces the costs enormously compared to a payroll holiday. the fact that the credit is not paid on any job vacancy, all the new jobs, reduce its costs or hiring. it helps business cash flow, which is important for small businesses. the credit is refundable. it does not require the business to be profitable or to be a for- profit business. that make credit more relevant for more employers. the credit could be claimed as businesses filed their normal withholding or income taxes. it has little additional administrative burdens. the credit goes to any employment expansion. it does not require hiring any particular employee group. in recent hire act requires

hiring peoe unemployed for a certain amount of time. it will lower the take up rate and reduced effectiveness. we estimate that the credit would at 2.8 million jobs to be taught in the first year and $2.3 million in the second year -- tops to the economy in the first year and 2.3 million jobs in the second year. you are boosting unemployment and boosting gdp and increasing gdp and increasing safety expenditures. let me address some common questions that we received about the job creation tax credit. what is the evidence that this credit will work? there are several studies up a similar new job tax credit from the 1970's.

they suggest a -- you get a similar number of cost per job created. and a similar cost effecteness. why would anyone expect a modest 15% credit would cost employers to expand? no one is arguing that a 15% tax credit is going to cause an employer who is not thinking of exnding to expand. the employers who are thinking about expanding in the next three or four years will speed up their plans. the survs we have done with employees -- which employers suggests that will happen. what about the dead weight and the fact that the tax credit will go to employers who would expanded anyway. this tax credit is about $7,000

with the average job. the only need one in four to subsidized jobs to be induced out with the cost per induced got to be -- he did not need a high hit rate -- you do not need a high rate for it to be cost effective. dead weight loss is much greater from tax credits to cover all hiring. why aren't all businesses more enthusiastic about this proposal? my experience is that businesses do not like tax credits that are targeted on particular behavior? they prefer a tax credits that go to all businesses without conditions. the reality is that the credit does not have to be popular with every business for it to be effected. i found that most employers did not like this proposal. they made some quite a bit too out comments about the proposal. -- some quite vitriolic comments

about the proposal. in sum, a job creation tax credit could create million or $3 million per year. that would go a long way to restoring the employer recovery. thank you. >> cliff? >> thank you. the mayors and other leaders are accustomed to anticipating and planning for likely stress to their counity. this is probably most of it in the emergency preredness area where mayors have no idea when the next hurricane is going to strike or the next flood will come through their streets or when the next swine flu epidemic

is going to be on their doorstep. they know that that is what to happen at some point. they had an infrastructure in place for thinking about it and a strategfor responding when it happens. a prudent approach to recessions with parallel that. you have no idea in the course of the business cycle when the next recession is going to hit. we have almost 100% certainty that there will be a time when we will see the big spike in unemployment. we have been throu this door rises in the jobless next over the -- historic increases in joblessness over the last few years. in the '60s and '70s, we had something that came closer to an infrastructure thatould allow us to be prepared r that

eventuality. we made considerable progress culminating in the public service employment program of the late 1970's which provided jobs for more than 700,000 disadvantaged adults in 1978. between 80% and 90% of those expenditures could be traced to a net job creation. in 1981, we completely dismantled that infrastructure for a public job creation. in some sense, it represented an of unilateral disarmament in the face of the uncertainty of business cycles. public service employment was eliminated in 1981. we put a complete prohibition against public job creation into our work force development programs that persisted there

for decades. i do not want to dwell on this history. the key point i want to make is that this was not the product of deep social science research, thoughtful science and policy evaluation, careful examination of the effectiveness of public service employment in the 1970's. the evaluations that were done, and there were many, were pretty good and encouraging enough to suggest that we should continue down that path. it also was not an obvious case of the inability to administer what is clearly a large and complex social enterprise. the record was good on that front. public's august employment reached an oppressive scale -- reached an impressive -- public

service employment reached an impressive scale. what happened was quite different. public job creation is caught in the political crossfire up one of many periodic flights we have in this nation about the role of government, the size of government. in the light -- in the late 1970's, the culmination of kennedy crises, a sharp spike in inflation, caused -- the culmination of the energy crisis, a sharp spike in inflation, they became the victim of bad backlash. the conventional wisdom now is that public job creation is politically unsupportable. there were discussions earlier in this administration and earlier in this recession about it. i think the administration reached that conclusion. we have some reason to question

whether that is the case, particularly now as the recession has persisted with such severity and that -- severity and depth. there w a bottom up effort through the emergency contingency fund. trinity's, counties, states, have - communities, counties, states, have created at a senate in scale, public jobs creation projects tt have been interesting. some of them have been quite innovative and a perigee. we have seen lite public concern or \ critz it is perceived as a humanitarian response -- it is seen at a humanitarian response.

we can provide resources to city, county, states, and get out of the way in the short term to allow that continuation of a bottom-up grass-roots approach. the extension, expansion, building upon what was going on in the emergency contingency fund would allow local and state initiatives to continue along those lines. one step beyond that, we could focus on providing additional federal dollars to local communities is to be added under an existing federal formula, probably something like a modified version of a community development block grant to get dollars out quickly. it would be pretty straightforward to establish what i think up as a fast-track mechanism that would allow local

communities to immediately proceed with public job creation projects that were focused on a pretty narrow list of pre- approved activities or projects. my own thoughts about what might be on that fast track list are projects like repairing schools, community centers, and libraries, cleaning up the vacant properties to relieve o closure-affected neighborhoods, and enhance that the levels to reduce hunger and promote family stability, augmenting staffing and headstart and early education programs to promote readiness and early literacy, and enhancing maintenance of parks, playgrounds, and public spaces. it does not matter what is on that list. the point is to think up things

with the great majority of the american people would say, that is a good thing to do. that is a worthwhile thing to do and a good way to give jobless americans who need work and opportunity to be engaged. -- to be re-engaged. we need a larger vision around public job creation. this will not be our last recession. we need a longer-term view and a longer term strategy for recessions and widespread unemployment. something that mirrors e structure we had to prepare for emergencies and natural disasters. one year ago, the national league of cities joined with three other national organizations to develop and

endorse a more comehensive long-term public job creation proposal. the pposal addressed many of the issues that would have to be addressed in a permanent job creation strategy. as such as allocation a distribution of funds, allowable uses of those funds, of the ability and targeting provisions. it is much easier to do and suitable to do within the structure of a public job creation program. importantly, protections to minimize substitution and of employees. you will find that proposal in a paper i wrote. it is on the urban institute web site if you are adjusted in more details about what a full-blown proposal with the plot.

hickel has to be creating some sort of capacity for infrastructure to support a job creation, one that could be radically expanded at the onset of a >> would close with a bottle of wine as a pro. now than ever. that is because we have made a lot of progress over the use and creative use of publicly funded jobs. it has not been progress that we have made on countercyclical job creation. it has not been responding to the recession. it is an approach through what is now called a transitional jobs programs where publicly funded jobs are created to make

their way into the labour market. that is a combination of countercyclical job strategies in times of recession and a transitional jobs infrastructure for better times and create a path forward in terms of how we can have a permanent infrastructure for the creative use of publicly funded jobs and one that will allow us to be much more prepared for the next recession. thanks. >>hank you. >> good morning. it is almost two years since the stimulus act was passed. at the outset, it was a sizable number of analysts tt were convinced that this was going to do great things in spurring jobs. by and large, i think that those people are convinced that it worked very well. there are a substantial number of economists and other analysts, including me, that thought that it would not do

very much, if anything did a by m. large, i am sure they believe that it did not do anything. you may take the position of -- there are different wayshat economists guard their secrets. i think we will have honest disagreements over the proposals that are being discussed today. for instance, the job creation credit. it may work. it may not. when i look at it, i affirm that it is going to say that we are going to downsize so that that guy over there can increase his employment and we will split the difference. we mentioned dead weight loss. that is an example of it. wean disagree on balance or not. for me, the problem is that they

are going to be a submerged between -- beneath much larger problems in the united states and the world economy today. if yousk me why there are such slow job growth, there are some factors at work. first of all, small businesses produce about 65% of the new jobs in the country. they are simply not hiring now. what our members tell us is that the housing crunch -- small businesses finance their expansion by means of borrowing on their real estate equity. their pvate home, their office, their investment properties. that is how they grow.

the barrault on those mortgages. a huge percentage of those mortgages are under water with no relief for the foreseeable future. they are now devoid of the chloral that is necessary for them to expand. there is -- the collateral that is necessary for them to expand. we are now approximately three weeks from the end of the year. we havno idea what marginal income tax are going to be. we do not know who it will hit and who will not hit. these are problems that could have been dealt with over the last two years and were not. congress is pulling an all- nighter for their exam tomorrow. they are operating in an environment like that and they cannot make decisions.

how this comes out, will be up to these companies and they cannot make decisions on expansion and hiring until they know where these rates will be. they have lost two years because of uncertainty over tax rates. thirdly, in the healthcare advisor, and the biggest of all questions that small businesses face over the last 25 years and will face for the foreseeable future is what is the cost of health insurance going to be for me and my workers and how might want to handle at? unfortunately, let me preface this, we need to do something about health care. it h been killing small business for over two decades. what emerged from a two-year process was pushing these other items, the tax rates and the housing crisis also the agenda favor of pursuing an extremely large health-care law.

in the end, it produced a law that will cause a tremendous number of problems for businesses over the next couple of years. it is corn to bury it businesses in a mountain of costs and red tape -- is calling to bury businesses in a mountain of costs and red tape. -- is going to bury businesses in a mountain of costs and red tape. it will cut the deficit. businesses have to live under the knowledge that there is this a lot -- of th very big law. i get queions about how we will handle the paperwork burdens and what are the paperwork burdens going to be in our answer has to be that we do not know. there will be about 10 years of regulation riding and each year u will have to spend a lot of time with your broker, your accountant, your attorney, and

you will have to find out what they are going to be. there are feedback loops on taxes. in the new law, if the owner of a sml business, if he happens to report his business income, as most do, under 1040, his wife gets a salary at her job. there will be a 0.9% payroll tax added onto her income which will hit his business income. if they sell a beach house, there is a 3.8% tax on profits. if these taxes costs and -- if these taxes kos an hid -- acid reflux, there will be a -- if these taxes cause an acid reflux, it will affect the rate.

for firms with over 50 employees, a huge uncertainty under the extent of penalties. to figure out what kind of penalties, the entreprenuership would have to know what their employees household incomes -- not only what i am paying my employee, but what is their husband or wife earning. how many people live in their house? that gives rise to the employee spouses uncle tax. if an elderly uncle moves into their house, it could trip up the wire that lance tens of thousands of dollars of penalties on the companies. and the other thing, because

this law has to be fix, we have seen the 1099 problem. i will be comfortable that it will be fixed, but it will burn precious time. this is detracting from solving those things. the question of how we get businesses and jobs growing again, how do we get governments i back on the ball on job growth, those are great questions. unfortunately, we have not begun asking those questions yet. this is a well intended plan that the panel is proposing will be able to be anything but a ripple on the top of these larger trends. we will have discussion on it. >> i am going to propose t

ideas. neither of which are highly costly in federal dollar terms, but both make sense in the short run and long run. in the first one is to create at least 1 million home ownership vouchers patterned after the rent voucher program that we already have and the second one is to provide a $5,000 per worker subsidy for expansion of registered apprenticeship training along with an increase in marketing budgets for the office of apprenticeships. let's start with the housing idea. this comes with the notion that a big part of our job losses have been in the construction sector. between mid-2007 and 2010, u.s.

jobs are down about 36%, but construction jobs are down about 6%. 30% of all jobs lost in the private sector since the early 2007 or in construction. this is a huge area. we are seeing that the house price declines and construction unemployment fee on each other. house prices and declining means less construction and less jobs and less housing demand. there is a negative feedback loop. now, normally, construction is a cyclical industry that comes back during a recovery, but so far, not in this case.

as was pointed out in a "wall street journal" editorial, it was said that both the depression and post-world war two era readily was signaled by an increase in housing investment. new housing construction expenditures have remained flat since the great recession was declared in 2009. the housing demand has not recovered because 15 million owners are estimated to owe $770 billion on their homes more than they are worth these are the continuing problems -- the are worth. these are the continuing problems. in addition, we have what bob just mentioned about the problem of home equity limiting the

expansion of small businesses in hiring because the small business people have very little collateral as a result of this huge reduction in house prices. now, we have tried some plans. i will not go into it. suffice it to say that we have tried ways of restructuring mortgages, a homeowner tax credits, these plans have generally been poorly targeted. they do not make sense in the long run. the benefits- it is unclear why certain groups are getting benefits and others are not. largely, they have been a failure, all they have spent large amounts of money. but what about home ownership vouchers? what is it? it would expand the current rent voucher program that would provide low-income families with an amount necessary to cover the

monthly carrying costs of buying a home. the filies would pay 30% of their income in return. the maximum amount would be equal to the local printer voucher for the monthly cost of caring for a home in the 25th percentile of all local homologous -- all local home values. for disciplines would have to participate in a home ownership training program. there also have to put some escrow in for repairs and it would provide local houng authority is funding for jobs to address some of these homes. we could have a recruitment plan. i cannot go into details now. why does this make sense? rents have increased by about 11% since the house prices have

dropped by about 20%. the fair market rent, which is the benchmark for subsidizing rent vouchers, that fair market rent is more than enough to cover the carrying cost of homes in about 90% of communitie in many cases, the amount is hundreds of dollars more a month than you would have with the housing vouchers. i have done some calculations on this. i have looked at nearly all metro areas, but in this packet, i'll look for communities. we can see that hse values would be well enough -- low enough so that the rim voucher

is more than covered by hundreds of dollars a month. if we add into that that people would be paying 30% of their income, even very modest earnings supplemented by the itc, would mean the cost would be very low. i estimate that we could finance approximately 1 million housing vouchers. i even have an offset. the offset is to lower the low income housing tax cdit, which is a supply oriented subsidy, which is just the opposite of what we need today. we need more demand for owner occupied housing, not subsidies to increase the supply this program -- increase the supply. this program would would increase housing affordability.

it would reduce the waiting for the current program and it would increase sustainable ownership for a long time. one of the things that people talk about is "haven't we tried that before?' first of all, there would be very little risk. they would hit some home ownership training and they would get a very good mortgage. so, that is the first idea. the second idea is to expand apprenticeship training. this is a great way to subsidize human capital, which we are trying to do thrgh the school an approach, and expand jobs.

there are very large sectors of the work force in apprenticeships. our apprenticeship system works were it is tried. we have very low budget amounts. the office of apprenticeships is only about $24 million a year, which is a drop in the bucket compared to the need. i was just in indiana yesterday and it turns out that to cover all of indiana, the office of apprenticeship employes to people. -- employs two people. this is a way of integrating education and training that link to careerist directly. no employer will provide an apprenticeships option unless they have a job to go along with it.

therefore, you do not have a low of mismatch. you do not have lost earnings will you are undergoing training like the situation in community colleges and four year colleges. the evidence shows that the gains from apprenticeships for exceed the gains even for technical training in community colleges. i think that we could move in that direction and have a substantial impact on jobs, but also it would be sensible in the long run, i wan-- in the long run. these are sensible in the long run stdpoint. >> i would think all of the panelists for sticking to their time allotments. that gives us more time for questions. i get the fit crack. sometimes i do not know where to begin. i will start with him.

-- with tim. could you elaborate on the difference betweenour plan and what is on the table and to speculate as to whether they could work together or some modified version of it could work if this package moves ahead? >> as i mentioned, the bl that was passed was not the obama a administration proposal. distinguish it from the proposal a have with john bishop and what you think it would be less affected? it is less money. in terms of creating jobs, the subsidy is solid. it is six. tucson% -- is 2.6%.

if someone is hiring right now, you do not get very much subsidy. you get a $1,00bonus if you keep the person for a year. the credit that we were proposing was somewhere around $7,000 per job. it was a much bigger subsidy. ct says that you have to be unemployed for 60 days. there are many problems with this. one is that employers simply it seem to not want to deal with this. there are stigma of fax -

effects. most of the research indicates that there would be lower effectiveness. if you want to target the disadvantages, then you are talking about public service jobs progra. the third aspect is that the higher at a + 2 -- higher act applies to all hires. one of the things that this does is increase is the dead weight loss problem. this is normally about 10% of employment in the u.s., even in a recession. there are expansions by some firms and new jobs created by

some firms. in contrast, what you decide -- once you decide you're going to hire, you're going to end up subsidizing and most employers will say that they will tell their tax accountant to figure out whether or not we can get any of this, but we are not going to take this into account or change our hiring procedures of who we hire to do this. in my opinion, if you want to target job creation, target job creation. this targets hires. this targets hires of the long- term unemployed, which employers to not want to deal with. they form the south to different tax accountants to find out what they are eligible for.

if you look at the data, there have been some preliminary reports by the treasury department and it is hard to see re act.act of the hher a i cannotee any sign that the quantity of this year is any different from previous years if you look at that data. i have not had a formal analysis of it. maybe we would find a modest effect. i'm pretty skeptical. i think that we need to start over again with an approach that targets will we are trying to increase, job creation. >> you talked about the two proposals that may take a little time to get up and running. do you have a policy or a strategy for boosting job demand ithe short term? >> i like kim's proposal.

. tim's proposal. proposal. in south carolina, where they put together a tax credit along with four or five people to market it, they have been able to create a new apprenticeship program for week. -- program per week. i do think that you could move the apprenticeship program very quickly. on the housing side, you can move pretty quickly because there are communities that have experimented with it on a very small scale. if thegovernment got behind it,

i think it could move very quickly. people are already paying more in rent than would be the cost of a home with a good mortgage. the cost may be very low and it would have this multiplier effect. aside thet's put uncertainty. let's say that we could find a way of getting equity for expansion. what would you think about the proposal that tim has made in terms of the tax subsidies. -- subsidies? are there others then once you

have mentioned above would make it attractive? >> -- than the os you have mentioned above the would make attractive? >> there would be a lot a lot of gamesmanship. people that were already going to hire somebody would cash yen and other companies would be subsidizing them for plants of the already had. -- plans of that they already have. -- plans that they already had. the companies that we talked to have a simple message. part of it is the housing thing. if i can i get credit, and if no one is buying my product, what i want to hire someone?

that is the reality that they face every day. i do not think it is one to make a big difference. -- going to make a big difference. i do not see anything on the horizon suggests that this will make a difference. this is a reality that they face. >> we have to recognize that we have employment today, somewhere around 140 million. if there is a stimulus of 2 million, that is on the base of 140 million. that is still a relatively small%. -- small percentage was even in today's economy, during an average year, jobs are created by employers that start up and

expand. there are jobs being created and people are thinking about creating jobs. this works on the margin. this season of prospect of selling additional goods or services. it takes a biness that is on the margin of thinking about this, that may be thinking about expanding in 2013 and said that this is something that will label me to expand more cheaply during the initial time. there are a lot of investment costs in hiring new employees. the question is, would rather hire new employees when you could have some of those investment costs covered by this wage credit program which you would get if you hired people in 2011 or 2012 under this proposal.

if you wait until later, you do not have those investments costs. you do not have to change very many decisions to make a significant difference in the job market. >> cliff, you talked about the need for an going infrastructure for a public seice job. what would be the nature of that infrastructure and do you have any idea of the approxime cost of doing that on an ongoing basis? >> public job creation programs are complicated programs to run. there is no question about that. part of the challenge of the bad policy cycle that we have had over the years is that we get into a deep recession and unemployment spikes and the pain gets too much at one point and only at that point do we get serious about putting people back to work and we try to do

with very ickly. it is a pattern that leaves the system vulnerable to sloppiness . and infrastructure, it probably wod be rooted in the development system. it also would be strongly connected to community because part of that strategy is about doing useful work in communities and there is an enormous amount of useful work to be done in our cities and towns aoss america. when i was at the center of budget priorities, tre was an extensive paper on what needed to beone to more fully fleshed out the very long list -- flesh out the very long list of public

benefits. there are lots of relationships that need to be built to run an effective job creation program. particularly between local government and work force agencies and nonprofit organizations. that is one to be better over time. what drives me crazy about the public job creation to date is a tendency to focus on the ministry of challenges we typically cost menace -- focus on the ministry of challenges.

when you think about the katrina experience in new orleans, it was terrible. it was a terrible breakdown in our governmental structures. we did not walk away from that experience and a side we were going to scrap t whole national system of emergency preparedness and disaster planning to be walked away and said that we have serious problems that we have to fix. local officials and state officials will appear sleeves to make it better so that the next katrina but does not have the same experience -- next katrina does not have the same experience. on the implementation son, we redoubled the effort to solve the problem. somehow, in the jobs arena, but has not been the dynamic. the dynamic has been to solve the problems and say that we cannot possibly do this and

throw our hands and walk away. >> i have a question for cliff. i would be curious if, tomorrow, people are wating this and congress says that this is a great idea. let's do this. it is enact the next wk. fees of lee, from your experience with these programs, what scale to you think it would be reasonable to talk about for 2011 or 2012? >> the scale would grow over time. the first thing i think we would do is go back to the structure where we cut off large numbers of publicly funded jobs. you turn that spigot back onnd allows states like illinois and

cities like los angeles to get back to what they we already doing. i think that you could get within four to six months, you can get jobs in place. >> how many in 2012? 1 million? >> i think so. he peak in the context of public service employment, we could go beyond that. >> one program that i like was the program in minnesota in the mid-1980s. to four months, i think that you can do something. i am glad to hear that you agree. s over here may

disagree. i will take them in the order from left -- from my left. >> one thing that concerns me about the proposals that you're talking about is whether you are fighting lg ago wars. i heard to cite data from the 1930's and things that have worked the question is, are we in an economy that needs massive, structural change and ese programs are not recognizing it the other bob noted that this has been -- construction is a cyclical industry and its return is a sign of the return of the economy. sometimes cyclical trends term

structural. -- turn up structural. we are in an unusual situation. we have tremendous cities of sparkling in houses that are entirely empty. the question is, are we actually want to see an increase in the return of demand for construction men have this huge overstock of houses in the country. i think it is a serious worry. look at detroit. they're trying to grapple with their problems. i do not think we have factored in these proposals. it is something that has been written by your colleague that has noted tha for the first

time in u.s. history, we have passed t point -- to put it simply, there is no discretionary spending left in the government accounts at this point. everything from day one is fully spent when congress walks in the door. if you look at programs that rely o government to fund them over the long haul, are you turning that into something of a promise that you cannot keep? i do not know the answers. those are the questions for me. >> i will refrain from responding. somebody mentioned the magic word of public jobs in the 70's. >> let me get to that.

first, bob talked about how we are for to get out of the housing situation. we certainly will not get out of it by subsidizing a larger supply of housing. i think that we have to shift it towards e demand. . -- the demand. point. demand rand has either gone up or is stable. turning to the public service employment, i think that you have to remember that in the 1970's, part of the backlash was that tre was massive substitution. a lot of that has to do with the fact that the early stages of the public service employment programs allowed for higher

wages and allow for people who were just unemployed -- allowed for people who were just unemployed. mayer's love the program because they could simply expand hiring in a not so different way than they were doing anyway. then, we tried to have a mo targeted progr in the late 70's. a program that limited wages. you only want people that cannot get other jobs to take those jobs and you want to maximize the number of jobs. as a result, the mayors were not so fond of that. when they found that we cannot use our normal work force for that. we did not want them to do that. today, you have the same thing. cliff said nothing about wages. wages are critical.

for an efficient program, you need ratively low wages. in a lotf major cities, there will be people screaming. they say that these are starvation wages and you cannot afford a family on them. they ignore the fact that when you have a wage, you can also get the earned income credit which would be a 4 of subsidy for wage. -- 40% subsidy for wage. there ara lot of decentralize ways to create jobs. small groups could fill up eight two page proposal and walk out puts it would create and you would have a competition. you created a competition.

he had four more proposals then you have funds for which is good because then you choose the best ones. you have a stronmonitoring program and you have this bottom of system that builds on the entreprenuership of local organizations. you can get things running more quickly and they can relate to neighborhoods and relate to people and if you cut them up, if they are not doing what they promised, you can cut off a few projects without cutting off the whole city of chicago. you want to look towards those approaches as well. >> i know that cliff but wants to respond on a point or two. while he is responding, i can't queue of people for questions -- i can queue up people for questions di.

i think we will start at the front and moving our way back. >> i am delighted to hear about this. he described the learning curve that i think that the country needs to go through. these were adjusted so that by the time you got to 1978 or 1979, you had very metal will -- very manageable substitutions. there's always going to be some of mouth. -- some amount. public service employment is under a great disadvantage because everything is visible. a reporter can go and see, or whatever. this is going to have what tim

referred to as leakage. leakages enormous. but it is invisible. -- linkage -- leakage is enormous. but -- leakag leakea is enormous, but it is invisible. i love bob idea about competitive structures. the only issue for me is that it takes quite awhile for the federal government to get a competitive program

>> and your finding something to help build skills and self confidence and lead to something later on. may not be a high a quality that some people would benefit from. but hopefully something that would move people forward. since you can hopefully do that you can assess if this job is the right fit. not only for this person in helping them move forward in their labor market goals. >> anybody else want to comment? >> my costs are quite low. i think that the million home ownership voucher proposal could cost only about 2 billion gross per year. that's extended over several years but i have an offset.

on the apprenticeship side, i think again it's a relatively low budget cost and it's again, a human capital initiative. it would cost less to subsidize apprenticeships than what we're doing now in the community college area where they are virgining and unable to deal with these huge enrollment office a cost of approximately 10,000 per student. i think my proposals would - could generally save money. >> very quickly here. we've got more questions in the audience. any quick response? >> just the political

feasibility is about as good as weather forecasting. beyond three days i can't do a thing. one thing that does concern me. you may have detected a theme here. i think all of them are really aimed at getting someone opportunities in the locality where they are at the present time. one of the dark secrets of home ownership it's highly correlated with unemployment rates. once you have that home it's hard to pack up and move to a place with better opportunities. you can find the same with public job exspan den si. are we locking people into places where jobs aren't in the long run. >> that open as door we won't go through. >> hi. i think my question is

directed with regard to the public sector. my concern is, if we're looking at the numbers of displacement employees with skill sets that could be marketed and take on a trainer role and then not just job skills but life training. my question is how will you sell the cost to the general public at home and a fractured congress where we look at cost in the long run verses the price of the program off the ground? the next part is, how will you take - if you're looking at that money. high don't we take existing agencies and have them allocate a pesht of whatever the budget is specifically to programs targeted five sectors of the company, five programs with stringent evaluation tools and measurements?

>> so i understand the first part to becoming back to the political feasibility. how do you sell it and sustain the cost. i would say i think we're in uncharted waters here. at the brink potentially of a double-dip recession. we're so far into this recession now and we've seen yet another bump in the jobless rate. we're not creating enough private sector jobs to keep the jobless rate even to where it is in terms of natural growth in the job market. i think as we get deeper and deeper and the pain in communities gets harder i think it's hard to predict what you can sell, right? my political adjustment would be you start with what the low-hanging fruit is and you get things that move in the right

direction going and i wouldn't expect those would be huge. that's i think unfortunate and a mistake. that's where i would start. i think there's other ways to certainly think about tapping existing programs. i think they're challenging in a timing perspective in terms of the established cost and claims on the dollars already there and getting federal agencies or existing departments to do things differently. i think there's medium and longer term things you probably could explore but it's hard to see how that's quick response to the current crisis. >> okay there was a question in the back over there? >> hi. i'm michael rose with the daily labor report. i was hoping you could go into more detail about the apprenticeship program.

just a matter of increasing funding or are you talking about something new also? >> yeah, thank you. i did talk about combining the expansion of the office to help market the program with a tax credit that would stimulate interest and that would be appropriate because remember, a lot of this work that's taking place at the employers site is funded by the employers and part of that funding is for training that's specific to an occupation and part of it is general course works a well. just as we fund community colleges and four year colleges with an education component i think certainly of apprenticeship programs ought to be funded through governmental help at least in some ways. in the south carolina experiment

showed the pro vision of a tax credit generates interest by employers and then you take that interest, together with added staff to help market the program to show them that you can benchmark your skills to a very high level and you begin to generate a self-sustaining effort. we have data on employers that use the program that they're very satisfied with the skills they generate and i think for too long in our human capital discussions emphasized only the academic approach and not the skills training. occupational skills approach. >> there was a question over here. >> thank you. i'm edward and i write reports todc voters. i want to ask cliff johnson a little bit about his idea for

public service employment. i don't think i heard you say i this that the jobs would be time limited. did you mean that? >> yes, i think any program of this nature would have to have time limits on the individual's employment in a particular spot, yes. >> and those would be firm? >> i think they have to be and really that's just an equity issue. a program of any scale would have only a certain number of job slots and if you allow a individual to stay in that job slot without any restriction or whatever, you need to as an equity matter try and tone opportunities to a considerable extent. >> would such a program be bias toward hiring people essentially because they qualify on the basis of being qualified by

virtue of their education skills and experience? >> targeting issues would be very, very important. in the current situation it would make great sense to target to some extent based on income or economic hardship so you're not using jobs for second wage earners and households not experiencing economic hardships you would focus on length of joblessness. similarly in terms of getting to some of these issues of need. those are devils in the detail. but it's both a need and opportunity in a structure like this to do that kind of targeting. news news the point that - the arrangement is bias as you say. hiring people that need a job regardless of their skills for the job that's available and

people who get so hired tend to develop a sense of entitlement and someone tends to become energy tren tched. >> well i think it's probably a little more complicated than that in tem terms of designing public service employment program that's designed to not only give people immediate employment but help them sort of move along the way. the transitional jobs program that cliff referenced as a model for getting back started that the idea should be that they would build their skills and be better positioned for a private sector job.

>> then you know the longer term vision about how you can use publically funded jobs as steppingstones in the labor market for people that need that help. >> is there one last question from the audience, otherwise i have questions from people on the web. i see four hands and i don't know how to distinguish because they all went up at the same time. can i do the quick fire one? no? ah. i have to make choices. back of the room? >> maybe this is more of a comment than a question. >> well, then we need to move on to a question. >> we need full employment. >> sorry, i apologize but we just don't have time for it. >> hi. i'm a ma part of the

university. president barack obama signed a small business act this year. given the fact that there's about 15 million dollars geared to the state for apprenticeship programs, do you think that money will be effective means for apprenticeship program? >> perhaps i'm not as familiar as i should be with the exact nature of that program, but i don't think that it's directly, you know just directly for apprenticeship. maybe for some other things as well. i think - given the scale of the existing office of apprenticeship. 15 million would be a great boom. as i mentioned, the staffing is very, very low. again, i think we could expand it and we could do it in a cost effective way and maybe talk

about the specifics of the program you're talking about afterwards. >> i'm more or less just repeat members say that the stimuli being put out there are too small to make difference in a market where no one is buying what they're selling. >> okay. so we have ended on a not too optimistic note, but we have had a lot of rich input in the discussion. sorry we didn't have more time for questions, but our panelist saw a need to comment on each others proposals. i thank you all for the coming and if you have comments you might want to share individually with the panelists, hopefully some of them will be around. so thank you all! [applause]

>> next, q & a with british reporter mathew paris and live at 7 am. your calls and comments on "washington journal". today, a look at recent efforts to regulate financial markets. the discussion covers the dodd/frank act and protectional bureau and proposals from the, g20 and other proposals in the financial services industry. live at 12:30 profit margins eastern on c-span 2. tonight, federal trade commissioner chairman on ftc

recommendations on how to handle on-line privacy and potential, do not track technology. the communiques or the on c-span 2. >> hi. i'm a specialist here atc span classroom. each year we conduct studentcam. the competition in students grades 6-12 seek issues affecting our nation. this year is washingtondc through my mind. we'd like for you to explain how the federal government has effected an issue in your life or community. select a topic that interested you. once you have it you can start. fully develop and research your topic. five to eight minute documents for more information. visit studentcam dot org or go

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